When you’re growing a product-based business, your focus is usually on things like production, distribution, sales, and shelf space. You’re making decisions fast, signing deals, and expanding into new markets.
But as your revenue grows, so does your exposure.
And one of the most overlooked risks for manufacturers, importers, and private label brands? Product recalls.
If you’ve assumed your existing insurance would protect you in a recall… you may be in for a costly surprise.
The Real-World Wake-Up Call
Let’s look at what happened to Crave Better Foods, the company behind Chipwich.
Early on, their team chose not to add product recall coverage. At the time, their revenue was under $1 million — and that choice probably made sense based on their size and risk profile.
But over the next few years, they scaled fast — reaching $24 million in annual sales. Despite the growth, their coverage never evolved to match their increased exposure.
Then came the crisis:
A listeria contamination tied to one of their manufacturing facilities led to a large-scale recall.
The result? Over $4.5 million in losses — none of it covered.
It’s a tough — and avoidable — lesson about the importance of adjusting your risk strategy as your business evolves.
What Is Product Recall Insurance?
Here’s the part that trips up most manufacturers:
Product liability insurance is not the same as product recall insurance.
Liability coverage protects you if your product causes harm to someone.
Recall insurance helps when you need to proactively remove a product from the market.
Product recall insurance typically covers:
- Shipping and disposal of affected products
- Customer and distributor notifications
- Public relations and crisis management
- Lost sales and business interruption
- Penalties from retailers or contract losses
It’s not just about compliance — it’s about protecting your brand, reputation, and cash flow during one of the most high-pressure situations a product company can face.
Why Product-Based Businesses Outgrow Their Risk Plans
What works when you’re small doesn’t always work as you scale.
As revenue grows, so does the size of your distribution network, the number of units in circulation, and the stakes of a recall. Suddenly, what felt like a small risk becomes a major vulnerability.
But unless you’re working with an insurance advisor who understands product-based businesses, this gap often goes unnoticed.
Here’s the big takeaway:
Growth isn’t just about more revenue — it’s about more responsibility.
And the insurance you bought when you were a $1M company may no longer be enough at $10M, $20M, or beyond.
Who Needs Product Recall Insurance?
If your business does any of the following, it’s time to take a closer look:
✅ Manufactures consumable or topical products – including food, beverage, supplements, pet products, cosmetics, or personal care
✅ Imports products or ingredients from overseas
✅ Private labels products under your own brand name, even if you don’t produce them directly
✅ Sells online or through major retailers where speed of response and liability are high stakes
Even if you’ve never had a recall before — that doesn’t mean you’re immune. Contamination, mislabeling, undeclared allergens, and even third-party lab results can trigger a recall overnight.
Don’t Let Growth Outpace Protection
You’ve worked hard to build a brand your customers trust. The last thing you want is for a single recall to undo that momentum — or threaten your ability to stay in business.
If you’re unsure whether you have product recall coverage, or if it’s time to revisit your insurance strategy now that you’re growing, let’s talk.
At The Bunker, we specialize in helping manufacturers and product-based businesses build insurance programs that grow with them — and protect them when it matters most.
Want a second look at your policy?
No pressure. Just clarity.
📅 Book a quick strategy call
Let’s make sure your protection scales with your success.