Food Safety, Product Recall, and FSMA (Food Safety Modernization Act)

On January 4, 2011, President Obama signed the Food Safety Modernization Act into law. This law is aimed at strengthening the security and safety of the U.S. food supply. The consequences of this are new requirements and regulations for the food and beverage industry, which include: importers, manufacturers, processors, bottlers, packers, distributors, receivers, and holders. This law excludes restaurants and farms, and has some exceptions for small businesses and specialty markets.

Some of the highlights of the new law include: FDA’s ability to authorize mandatory recalls, more frequent inspections, increased scrutiny of imported foods, and establishment of science based standards. One of the new requirements businesses should be implementing right away is the establishment of a written plan that spells out the possible problems that could affect the safety of their products. The plan would outline steps that the facility would take to help prevent those problems from occurring. Food and beverage businesses should also be looking at the qualifications and processes used by their suppliers with special attention paid to foreign suppliers.

The increased exposure to recalls can have a huge effect on a company’s bottom line. As the article below points out businesses should be made aware that there is a specific exclusion on liability policies for recall expenses. To remedy this food and beverage businesses should obtain a Product Recall and Contamination coverage. The rates charged for these policies have remained very affordable even with the implantation of FSMA. With the increase in recalls and the robust language found on policies there is a huge value in transferring the risk. These policies include coverage for product recall, loss income, rehabilitation, crisis response, and consultation expenses. Jason Holmes, ARM has many years of experience insuring the food and beverage industry and has a proven track record in negotiating favorable terms for Product Recall and Contamination Insurance.

Food Safety Expert Warn that New Food Recall Law May Catch Companies Offguard


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