Claims Example: Product Recall

What became of the claim?

Commercial Legal Expenses

Event

A craft brewery mistakenly labeled 7,200 beer bottles with an ABV of 6.5%, but due to overfermentation, the actual ABV ranged between 8.5% and 9%.

Impact

Customers reported the discrepancy, leading to social media backlash, media coverage, and regulatory scrutiny. The brewery incurred approximately $100K in costs related to testing, recalls, refunds, and PR efforts.

Response

Upon discovering the issue, the brewery promptly notified their insurer, Delta, which coordinated the recall process. All associated costs were covered without any excess payment required from the brewery.

Outcome

The swift and transparent handling of the recall helped the brewery maintain customer trust and avoid severe legal consequences.

As with many product recall incidents, this event was caused by human error. Stricter staff training and quality assurance protocols, as well as a conservative labelling policy and mock recall drills, could have prevented this incident.

*This case study has been modified to deidentify any real-life individuals, events, or organisations (May 2025).