One of our PSC Connect ARs, Greg Thomas of GJ Insurance Consulting, has demonstrated the benefits of having a broker by saving one of his clients over $100,000 when he represented them in a Product Recall claim that could have put them out of business.
Greg’s client is a small, not-for-profit company that markets a range of consumer goods & food products Australia-wide; donating all profits to fund wells for fresh water in 3rd world countries.
The brand found itself in the midst of an expensive voluntary Product Recall case after mislabelling a range of muesli bars. The client neglected to include the term ‘contains tree nuts’ on the packaging, and when the product was purchased and a consumer suffered a reaction, they realised the error and started to pull the products from shelves across Australia. With stock in one of the major supermarket chains the client incurred not only their own costs but the costs incurred by the supermarket. More costs were also accumulated through relabelling stock that was already in distributor’s warehouses nationwide, resulting in a staggering $175,000 claim.
As their Broker, Greg Thomas, with help from PSC Connect Regional Manager, Karyll Dean, acted on their behalf throughout the entire claim process from lodgement. The interesting thing with this Product Recall case was that both our client and the muesli bar manufacturer had Product Recall policies with the same insurer. At first it was unclear as to which company was ultimately liable. Whose policy should cover the claim? After some investigation however, the insurer decided that our client was liable and that their policy should respond.
The case was further complicated as the insurer claimed that our client was not covered under a sublimit of their policy wording, which classed their actions as ‘deceptive behaviour’. However, unlike the other similar insurance products on the market, this particular insurer didn’t include a description of what ‘deceptive behaviour’ meant. The PSC Connect team helped argue the case that it was, in fact, an accidental omission, and should be covered by the policy.
The entire process was difficult and frustrating due to the insurer digging in their heels throughout the process and being unresponsive to queries for long periods of time. Finally, although the insurer tried to exclude items throughout the process for various reasons, with the additional involvement of the Steadfast Group’s Triage team, the insurer ultimately paid the whole claim.
The PSC Connect Difference
Without Greg Thomas and the PSC Connect team, it is unlikely that the client would have had the success that they did with the claim. Such a substantial claim would probably have gone legal, taking years to resolve and accumulating huge legal fees in the process – with no guaranteed win. As it stands, the client has been able to continue operations and only had to pay the relevant policy excess.
As the broker, after discussions with his client and analysis of the risks they faced, Greg Thomas identified the need for Product Recall Insurance well before the claim occurred. This effectively saved the business from incurring a massive loss and possibly even bankruptcy.
This Product Recall case highlights the value that a good broker can add to your business, and the difference that it makes being part of the PSC Connect team.