Many retailers today face an increasing risk related to product recalls, which can result in extensive losses and a variety of liability claims. For example, a major supplier of meats was recently forced to recall more than seven million pounds of its product after customers found bone fragments and pieces of cartilage in their hot dogs and sausages. The large scope of this recall, and the associated challenges, is by no means unique to this company. Specialized insurance policies should provide protection to minimize most recall losses and exposure from liability claims. However, insurers often seek to rescind recall policies by asking courts to void the policies from their inception, meaning that the polices would not provide any coverage for any pending or future claims. A large number of these recall claims are being brought under New York law.
Hunton & Williams LLP’s Insurance Coverage attorneys Syed S. Ahmad and Tae Andrews recently authored an article in FC&S Legal, Now You See It (Now You Don’t?) – Recent Insurer Efforts to Void Coverage Based on New York Rescission Law, in which they address New York law on rescission and steps that can be taken to avoid rescission.