Inside This Article:
- Nearly 1 million bottles of Kirkland Signature prosecco were recently recalled due to bottles breaking or shattering, including one reported injury.
- The large-scale beverage recall follows other recent food and drink recalls involving metal contamination and allergen risks.
- Product Recall Insurance and Product Liability Insurance can help companies pay for costly recall logistics and injury-related expenses.
- Additional safeguards such as Business Interruption Coverage and Manufacturers Errors & Omissions (E&O) Insurance can help protect companies from long-term financial harm.
Nearly 1 million bottles of prosecco sold by Costco have been pulled from store shelves after reports that some bottles may suddenly break or shatter, including one incident that caused a customer injury, according to a recall notice issued in November 2025. The more than 941,000 bottles of Kirkland Signature Valdobbiadene Prosecco DOCG — sold between April and August this year in a dozen states for about $8 each — were recalled after importer F&F Fine Wines International received 10 reports of shattering or breaking, one of which resulted in a laceration.
It is one of multiple food and beverage recalls to be announced in recent weeks, including more than 1 million bags of shredded cheese that were recently recalled after metal fragments were found in the product, and a Dec. 2 recall of Ritz cracker sandwiches due to incorrect labeling that could lead to an allergy risk. These types of recalls can escalate into major financial and legal crises for manufacturers and distributors, said Saad Ali, Associate Broking Commercial Manager, Commercial Insurance, Ontario Division, Burns & Wilcox, Ottawa, Ontario.
“The costs could be substantial, from both a liability and recall aspect,” he said.
Companies involved in a product recall must consider not just potential injuries but also costs tied to physically recalling affected items — expenses that can be covered by Product Recall Insurance and Product Liability Insurance.
“Not having insurance coverage could be disastrous,” said Michael Danhaus, Senior Underwriter, Commercial Insurance, Burns & Wilcox, St. Louis, Missouri. “It does not matter if it is a business just starting out with $10,000 in sales or a well-established company with millions of dollars in sales. Those expenses could potentially ruin a company.”
Not having insurance coverage could be disastrous. It does not matter if it is a business just starting out with $10,000 in sales or a well-established company with millions of dollars in sales. Those expenses could potentially ruin a company.
Managing costly recall logistics
When a recall involves nearly 1 million units of a product sold across multiple states, recalls can become a significant logistical and financial burden. According to Sedgwick’s latest U.S. Product Safety and Recall Index, the number of recalled units jumped more than 200% in the third quarter of 2025, reaching 258.98 million units and marking the highest quarterly total in almost three years. The data, released Nov. 20, showed that the number of recall events declined slightly during the same period.
Costs associated with recalling a large volume of items include shipping and disposal fees for recalled inventory, in addition to regulatory and legal expenses, Ali said.
“A Product Recall Insurance policy would typically help cover the expenses associated with removing the recalled product from stores, disposing of the recalled product, replacing the recalled product, and notifying the media,” he said.
A Product Recall Insurance policy would typically help cover the expenses associated with removing the recalled product from stores, disposing of the recalled product, replacing the recalled product, and notifying the media.
While Manufacturing and Distribution Insurance policies such as Commercial General Liability (CGL) Insurance may include limited coverage for product-related injuries, recall costs are generally not included and require separate coverage. “Product Recall Insurance is an often overlooked coverage,” Danhaus said. “Repairing your company’s reputation is part of it, as well. A brand can be damaged after a product recall. Coverage for Reputational Harm could be included or offered as an add-on to a Product Recall policy.”
Product Recall Insurance is an often overlooked coverage.
Reputational harm after a recall, Ali noted, “can affect a company for years.”
How insurance gaps can leave companies exposed
Depending on the policy, Product Recall Insurance may also include Business Interruption Coverage, which can help pay for a manufacturer’s lost income when operations are disrupted by a recall, as well as the cost to pay employees for extra time spent on crisis management, Danhaus said.
“That could add to the operating expenses for a company,” he said. “A lot of times, that can be covered. It just depends on the carrier and what their product offers.”
The cost of potential consumer injuries should also be considered. While CGL Insurance may have some coverage for these claims, Product Liability Insurance is key to addressing third-party bodily injuries or property damage caused by a defective product, including medical expenses and potential legal defense. In October, a New York woman filed a proposed class-action lawsuit against Newell Brands, Inc. over a recalled Oster French Door Countertop Oven that allegedly posed a burn hazard and a repair kit that reportedly failed to address the problem, Newsweek reported.
“The intent of Product Liability Insurance is to cover the risks associated with a business being held responsible for injuries or damages caused by its products against potential design defects or manufacturing defects,” Ali explained. “From a liability aspect, the insured will have to think about injuries caused from their faulty product, which can range from minor inconveniences to severe and even life-threatening harm.”
According to Ali, a Manufacturers Errors & Omissions (E&O) Insurance policy “is a great complement” for these businesses. “Manufacturers E&O coverage is crucial for companies that produce goods of any kind, as it serves to protect an insured against third-party financial loss claims, failure to meet a deadline, and breach of contract, to name a few,” he said. “I think it goes without saying that those seeking coverage for any business should always consult with an insurance professional as well as their lawyers to try and minimize any potential gaps in coverage and have the best chance at being protected against a future claim.”
Those seeking coverage for any business should always consult with an insurance professional as well as their lawyers to try and minimize any potential gaps in coverage and have the best chance at being protected against a future claim.
Recall ‘could happen to anybody’
According to data from the Public Interest Research Group, food and beverage recalls and alerts increased 8% between 2023 and 2024, and the number of individuals who were hospitalized or died from food contamination doubled. Undeclared allergens, listeria, and salmonella were the top three reasons for food recalls in 2024.
“On the news, we all see there are many consumable products being recalled in grocery stores,” Danhaus said. While food recalls may occur more frequently than in some other industries, “anybody with a product exposure could have this happen,” he said. “I do not think it is relegated to one industry or class of business. It could happen to anybody, honestly.”
Ali emphasized the importance of implementing strong preventive measures in order to reduce the risk of product liability claims and recalls, recommending “measures such as evaluating products for potential hazards during the design phase, quality control testing, compliance with regulatory standards, and managing risks within the supply chain.”
