Product contamination costs millions; insurance helps mitigate financial risks for businesses.
Product contamination continues to be a major issue in the food, pharmaceutical, and cosmetic industries. In 2022, 78 products were recalled due to contamination, with the number slightly decreasing to 62 in 2023. As of November 2024, 57 products have been withdrawn. The cost of such recalls can reach millions of zlotys, including product removal, production halts, and potential consumer compensation.
Contamination incidents come with a hefty price tag. Costs include the value of recalled products, lost contracts, and operational disruptions, all of which can severely affect a company’s bottom line. Furthermore, if consumer health is impacted, compensation claims can escalate costs exponentially.
To mitigate these financial risks, businesses can opt for Contaminated Product Insurance (CPI). This insurance covers the value of contaminated goods, brand reputation damage, and lost profits. It also compensates for the costs of product retrieval, transportation, and disposal, providing comprehensive protection for manufacturers.
CPI insurance has gained traction in Poland over the past decade, with more businesses adopting these policies as a standard. As awareness of the risks of contamination grows, companies are increasingly investing in policies that offer broader coverage beyond just personal injury or property damage.