Toxic Hand Sanitizer and Recall Risks

The coronavirus pandemic marked the biggest health concern of 2020, but toxic hand sanitizer risk became alarming as well. The FDA announced in June that methanol (aka wood alcohol) in 9 different hand sanitizers could be harmful to a person’s health. By August, several dozen other toxic hand sanitizers joined the warning list. Manufacturers can protect financial health with appropriate insurance.

Ethanol Containing Methanol

What all of these toxic products have in common is the label listed ethanol or ethyl alcohol, which tests revealed to be contaminated with methanol. The recall comes as a time when media is constantly reminding people to “wash your hands” to avoid spreading COVID-19. Meanwhile, Canada Health has also reported cases of such products contaminated by methanol or ethyl acetate.

Some of the companies that have distributed methanol-containing hand sanitizers are market newcomers sourcing ingredients outside conventional supply chains. These manufacturers lack quality control and may be cutting corners on safety.

Insurance for Recalls

A product recall can disrupt a manufacturer’s production schedules and wipe out revenue. Additionally, it can severely hurt the company’s reputation and lead to a series of costly lawsuits plus product shortages. Recalls serve as alerts for all product makers to monitor and work toward better quality control.

The solution that protects companies from these unexpected disasters is called product recall insurance. The combination of this insurance with enhanced supply chain guidelines can mitigate financial damage associated with recalls.

Another recent massive recall involved the Boy Scouts of America recalling 78,000 Cub Scout pins due to the presence of excessive lead. Federal regulations set limits on lead in products, as the recall has triggered a federal investigation. The pins were made in China. An earlier recall issued by Canada Health was associated with lead beyond the legal limits found in toys, also made in China.

When a product physically harms a consumer, litigation can get very expensive. General liability insurance might cover certain recall expenses, but not necessarily everything. So insurance experts warn it’s wise for manufacturers to invest in product recall insurance.

The summer of 2020 has been marked by toxic hand sanitizer recalls, which should make all manufacturers assess their production processes. The combination of general liability and product recall insurance provides solid protection in the event of a product defect. Contact the experts at CIA Insurance and Risk Management. We are here to help with all your commercial insurance needs.

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