Underwriting agency Delta Insurance has launched a new product recall policy for small and medium-sized enterprises (SMEs).

Delta says it will offer two distinct policies aimed at protecting businesses from costs associated with the removal and replacement of products as well as coverage for branding protection.  

It says its Consumable Products policy will cover issues relating to supply chain and distribution, while the Consumer Goods and Component Parts provides expansions to also include protections for design and manufacturing errors, with coverage of up to $5 million available.  

“Traditionally, Product Recall insurance has focused on the higher end of the market and has been a costly cover with premiums running into tens-of thousands of dollars,” Delta Insurance Australia Casualty Underwriter Oliver Gilmore said.  

“We’ve recognised that smaller companies face the same risk on a reduced scale, but with an impact which can be devastating; not many organisations can or want to wear a fifty- or hundred-thousand-dollar loss – and with product recalls, that impact can come out of the blue.”  

Mr Gilmore says the product intends to provide “affordable options” for SMEs and is currently being marketed on its broker network.  

“While this is a new product category for most of our brokers, the policies are designed to be accessible for the dealer network and their customers.

“Most risks are assessed via a one-page proposal form requiring fairly basic information, with larger or more diverse risks going into more detail.”  

He says Delta intends to launch a “broker portal” next quarter to help streamline the process for customers and brokers as it anticipates “brisk demand”.  

Delta says the policies will be available for a “wide range of industry segments” but will hold exclusions for pet and infant foods, bulk consumer goods, and tobacco and related products. Other industries impacted by exclusions are major automotive and aviation manufacturers and chemical producers.

New Zealand-based Delta expanded into the Australian market last year.