Why Product Recalls Are a Growing Concern—and What We’ve Learned
John Naughton, Manager - Product Recall, Berkley Specialty London
When you hear about product recalls, it’s easy to think of them as just another headline. But if you dig a little deeper, you start to see just how much they reveal about the world we live in. They’re not just about consumer safety—they’re about the complex, and sometimes fragile, connections between manufacturers, distributors, and regulators. And as we look back on 2024, one thing is clear: recalls are rising at an unprecedented rate, and 2025 is unlikely to slow this trend.
But behind these numbers is an even bigger story. Recalls are more than just logistical headaches—they bring significant financial and reputational risks. A recent survey found that 39% of respondents had experienced recalls in the past 5 years that had ranged in cost from USD10m to USD49m, with some incidents reaching as high as USD99.9m.
That includes financial losses including lost sales, legal fees, and the cost of remediation. It also includes the less-tangible hit to a company’s reputation: consumer trust, once lost, can take years to rebuild.
For companies navigating this landscape, having the right partners makes all the difference. At Berkley Specialty London, we’ve spent nearly a decade helping businesses face these specific challenges head-on. From our perspective, the past year tells us a lot about the growing pressures on industries and where we’re heading:
The numbers behind the trend
Across much of the western world, recalls are on the rise. In the US, the number of recall incidents has steadily risen year on year since the Covid pandemic and the number of food, drink and cosmetics recalls reached a 4 year high in 2024 with nearly 2,000 recalls reported by the FDA. In Europe, the number of EU Food RASFF notifications increased 15% in 2024, reaching an 8 year high.
Food and drink is not the only source of concern. Consumer goods and automotive component part recalls are also on the increase. In 2024, the US Consumer Product Safety Commission recorded the second highest recall figures since 2017, with over 127 million units of consumer product recalled in the country. In Europe, EU Safety Gate recalls increased 26% over prior year and Health Canada posted the highest number of recall events in the past 8 years. Automotive recall numbers reported by NHTSA and the UK authorities also showed an increase over prior year. In the US, NHTSA stated that 34 million units were impacted in 2024 with an average of over 32,000 units impacted by each recall event.
The industries feeling the heat
Food & Beverage leads the pack, comprising nearly 60% of all recalls. Mislabelling, contamination, and health risks dominate this sector’s issues. Take the recent Salmonella outbreak in cucumbers from Agrotato, S.A. de C.V., which affected 68 people across 19 states in the U.S., leading to hospitalizations and cascading recalls by other companies. This one event ended up involving products sold in 35 states and five Canadian provinces, impacting major retailers like Walmart and Costco.
It’s a reminder of how one recall can trigger a domino effect across similar producers as well as downstream customers. Other notable examples include:
A peanut contamination in mustard from FGS Ingredients in the UK, prompting over 100 related recalls.
Brucepac’s massive recall of nearly 12 million pounds of ready-to-eat meat and poultry in the U.S., affecting schools and other manufacturers who used their products.
Sifto salt recalls in Canada due to metal shavings, which prompted further recalls of related products.
In the Automotive sector, which comprises approximately 25% of all recalls, safety defects and software issues are the main culprits, affecting hundreds of thousands of vehicles globally. Ford recalled 144,516 Maverick models over a rearview camera glitch, while Stellantis, the parent company of Chrysler, recalled 206,502 Jeep and Dodge Durango SUVs due to antilock-brake system malfunctions. With recalls affecting hundreds of thousands of vehicles globally, carmakers are now shifting more of their recall costs onto their suppliers, creating even more challenges for the recall market.
Even Consumer Electronics hasn’t escaped scrutiny, with battery failures and overheating risks behind 10% of total recalls. For instance, Bissell recalled 142,000 vacuum cleaners in the U.S. due to fire hazards, in addition to roughly 14,600 units sold in Canada.
The hidden cost of Recalls for insurers
These examples highlight a critical issue: many companies simply don’t have the financial resources to cover the aggregated effects of a recall. That raises a bigger question for insurers. If the aggregated losses cannot be recovered from the company causing the loss, who picks up the tab?
The chances are that the losses will be attributed to insurers and there is little chance that insurers will get their money back from the company that caused the loss in the first place.
This leaves insurers as the primary lifeline, but not all insurers have the experience, or capacity, to navigate such complex claims.
At Berkley Specialty London, we’ve built a dedicated team that focuses exclusively on Product Recall claims. It’s not just about offering coverage—it’s about being there for our clients when it matters most. As a member of W. R. Berkley Corporation, we bring decades of expertise to help businesses recover and rebuild.
The role of regulators
While recalls address problems after the fact, regulators are focusing on prevention. In 2024, key regulatory updates have aimed to minimize risks:
In the Food & Beverage sector, the FDA has enforced stricter allergen labeling and Salmonella controls, while the USDA has introduced new standards for poultry safety.
In Automotive, updated IATF guidelines and stricter emissions standards are shaping the future of electric vehicles and recycling processes.
These evolving regulations are a reminder that staying compliant is as much about foresight as it is about adaptation.
Looking ahead to 2025
The reality is, as long as production and supply chain issues persist, so too will recalls. Consumers, too, are becoming more vigilant, using online tools to stay informed about affected products.
2025 will bring its own challenges, from potentially tighter food safety rules to regulatory shifts. Increased recall cost related to tariffs on ingredients/components, improved pathogen testing and more prescriptive recall processes may also come into play.
What’s certain is this: the upward trend in recalls is unlikely to reverse. Businesses need to prepare not only to manage the risks but to protect their reputation and retain consumer trust. At W/R/B Underwriting, we’re ready to go the extra mile to help you do just that