Product Liability vs. Product Recall Insurance: What’s the Difference?

Product liability insurance addresses legal liability when a product allegedly causes injury or property damage. Product-recall coverage addresses a different exposure: operational expenses of a withdrawal, such as notification, shipping, disposal, or replacement, depending on the policy. The Insurance Information Institute describes these as separate coverage discussions, and an illustrative ISO CGL form excludes certain product recall expenses.

A recall can also prompt a lawsuit, so one event may raise both questions. Compare the CGL products-completed operations wording with any recall policy’s trigger, covered expense categories, voluntary-recall terms, waiting period, and sublimits. Ask whether recall cover pays first-party expenses, third-party recall demands, or both, and what event activates it. Those distinctions can change how a seemingly similar policy responds.