product-extortion-contaminationAs a class of insurance products extortion and contamination seeks to protect the policyholder against losses arising from either the threat of or actual contamination of a product for either business or political gain or for financial gain. Whilst it is easy to assume that such extortion is undertaken by criminal gangs engaged in extortion for purely financial motives or industrial sabotage, it should be borne in mind that companies engaged in certain business activities also face such threats from politically motivated action groups.

What is products extortion insurance?

the policy protects the insured against costs sustained by the insured in the payment of a ransom or demands arising from a threat or perceived threat being made to contaminate or interfere with the quality of the insured’s product or the suggestion that a contamination or interference has taken place but that the details will only be provided to the insured upon the payment of the ransom or meeting of the demands.

In addition to the ransom payments the policy also can provide for the loss of ransom in transit along with the costs incurred in complying with the demands, the costs associated with the hiring of specialist advisers and in the costs of investigation into whether products have actually been contaminated and the extent of such contamination.

What is products contamination insurance?

The policy protects the policyholder against losses attributable to an actual or believed contamination of products that causes the insured to believe that the product is dangerous or sub-standard to such as degree that it should be withdrawn from the marketplace. The policy provides cover in respect of the costs associated with the recall of the product and any subsequent replacement and destruction of the product along with additional protection is respect of the insured’s loss of profit arising from the contamination and any costs associated with the mitigation of any losses dues to the damage of a brand or reputation of a particular product line.

Who needs products extortion or contamination insurance?

Whilst this class of insurance is not generally sought after by most companies, the range of businesses that may be affected by such action is wide and ranges from manufacturers, wholesalers and retailers. exposure to such risk will depend on a number of key risk areas will certainly include the type of business you are engaged in. Is it politically sensitive? Are you involved in the supply of food and beverage products on a significant scale? Do you operate in areas of the world where exposure to such risks is naturally greater?

How do I buy product extortion and  contamination insurance?

The market for this class of insurance is restricted to a small number of specialist insurers with expertise in this area and you will generally have to approach the market via an insurance broker. If you would like assistance or further advice on products extortion  and contamination insurance please call Steve Lewis or Adrian Tonks directly on  0161 300 2930.



0161 300 2930 Blackfriars Group