Food Safety Magazine, April/May 2011

making process, leaving them open to recalls beyond their control.

How Should Businesses Respond?

As there is likely to be an increase in
the number of product recalls and prose-
cutions, companies should be improving
their risk management processes as well
as considering their financial risk mitiga-
tion options, as product recalls are an ex-
pensive and time-consuming exercise,
which can do lasting damage to brands.
There is a well-established international
insurance market for contaminated prod-
formed about recalled products, as the FSMA requires grocery stores to prominently
display recall information, as well as actively notifying customers.

Ian Harrison is executive director with Lockton Global Casualty. He advises food producers and retailers on risk management and contaminated product recall coverage.

Read more about the FSMA in our Signature Series articles on our website at
www.foodsafetymagazine.com/signature.asp

“The [Food Safety
Modernization Act] is
designed to revamp
food production safety
standards and renew
consumer confidence
in the safety of the
food supply.”

uct insurance (CPI), and it is an increasingly popular option for food manufacturers and importers. The implications of the FSMA on the CPI market are likely to be significant, if both the size and frequency of CPI claims increase. Food manufacturers and importers will need to review their insurance coverage limits and policy wording carefully in light of their significantly increased exposures.

Better Food Safety Likely

Although the FSMA is not universally welcomed, it is likely that the higher levels of oversight that the bill imposes will result in better food safety practices all the way down the food supply chain, and this in turn will improve consumer confidence in food safety.

For most consumers, the new regulations should mean that they are more in-

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