Wednesday, 26 July 2017 14:41

Product Recall: Is Your Company Covered?

From eavesdropping dolls to faulty kitchen appliances, from combustible smartphones to defective airbags, the world is a dangerous place and product recalls are a fact of life. The public needs protection from unsound products and manufacturers need protection from product recalls.

It is a common misconception that product recalls are covered under a general or product liability policy. Those coverages do a good job of covering bodily injury and property damage, but they generally exclude product contamination and product recall events. This limitation on coverage is referred to as the sistership liability exclusion. Adding a product contamination or product recall policy protects a company’s bottom line by covering the direct costs of recall, but transferring the risk in this way is only one part of closing the recall exposure gap.

Every company with a product on the market, regardless of size, should establish solid product risk management policies and procedures for handling a recall or contamination event.

Published in Blog style
Tuesday, 18 July 2017 10:05

Summary Plan Description: ERISA

The US Department of Labor has been conducting frequent ERISA compliance audits and, in many cases, imposing significant penalties for noncompliance. This should spur employers to make sure that they are in compliance with that law’s plan documentation, disclosure, and annual reporting requirements for all applicable plans.

Unfortunately, most employers are not in compliance with the Summary Plan Description (SPD) requirements. Why? Many companies mistakenly assume that insurance contracts, certificates of insurance, SBCs, and benefits summaries fulfill the ERISA requirements for an SPD. Those documents do not include the required or recommended provisions that protect the plan, the employer, and plan fiduciaries.

All group health plans subject to ERISA (and all size groups) are required to provide participants with an SPD. An SPD must be written in a manner calculated to be understood by the average plan participant and must be sufficiently comprehensive to explain the following: the plan’s benefits, its claims review procedures, and the participant’s rights and obligations under the plan.

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