2023 Product Recall Report: Q1 Recalls Jump 14.2%

Jun 21, 2023

2022 broke historic records with the highest number of product recalls in the United States. Could 2023 be on track to beat that record? Possibly. According to Sedgwick’s 2023 Product Recall Index report, the first three months of 2023 saw the total number of product recalls increase 14.2% from the previous quarter. 

Despite the increase in the number of recall events, the total number of products pulled off the market in Q1 actually dropped 21.6% from the previous quarter. In addition, the total number of recalled products is also far less than the same time period last year. 

Sedgwick’s Product Recall Index report runs quarterly and aims to “provide businesses with valuable insights to help protect their brands against operational risk and reputation damage.” The report is a compilation of data pulled from a number of organizations, including the FDA and USDA, among others. 

According to Sedgwick’s press release, here are the top takeaways from each of Sedgwick’s five product categories:

  • Automotive: Auto recalls are up 3.4% from the previous quarter. Of these recalls, electrical systems were responsible for 48 events, followed by equipment (46) and airbags (17). 
  • Consumer Products: With 94 events, consumer products saw the highest number of recalls in a single quarter since 2015. A total number of 23.1 million units were recalled — up an astounding 442.1%. 
  • Food and Drink: FDA recalls rose 23.2% from the previous quarter (117 events), but the total number of units pulled from the market actually dipped by 78.7% (39.3 million units). The number of units recalled by the USDA, however, increased 1,129% (2.9 million units), even though the number of recall events held steady at 11. 
  • Pharmaceutical: More pharmaceutical recalls (144 events) took place in Q1 of 2023 than in any single quarter over the past 18 years. The total number of impacted units reached 49.5 million, an increase of 1,071.8% from Q4 2022. 
  • Medical Devices: Medical-device recalls increased by just 4.6% (252 events), with manufacturing defaults cited as the leading cause (59 events). However, concerns over quality drove 68.6 million devices to be pulled from the market (82.3% of all devices recalled). 

Here’s what Sedgwick says to be on the lookout for through the rest of this year: 

  • New guidelines for Electric Vehicle safety and standards for low- to zero-emission vehicles. 
  • Continued strict regulatory enforcement for consumer products. Manufacturers should review and update their recall and crisis communication-response plans in light of the Consumer Product Safety Commission’s (CPSC) new enforcement strategy. 
  • By the end of the year, the FDA plans to publish guidance on a list of topics, including allergens, dietary supplements, food additives, and topics related to the Food Safety Modernization Act (FSMA) and labeling. Additionally, in response to last year’s infant formula crisis, the FDA continues to press the industry for swift improvements to their manufacturing and distribution processes. 
  • With the public health emergency conditions of COVID-19 lifted, we may see changes to the liability immunity granted to pharmaceutical companies. The FDA also has plans to research the use of cannabis for medical purposes and propose stronger restrictions around the manufacturing of tobacco products. 
  • The medical-device industry hopes to see improvements to the supply chain, thanks to additional funds the FDA plans to allocate to programs that prevent supply shortages. Cybersecurity will also remain a key focus for both the FDA and device manufacturers.

For more details on Sedgwick’s index, you can download the full report

Recalls are something every industry works actively to avoid, yet the risk is always there. With a proper response plan and a comprehensive insurance policy in place, businesses can weather the storm in the event of a recall. 

By partnering with Jencap you can stay on top of trending industry news, and tap into our wealth of expertise. As a leading wholesaler, our robust market access ensures you can find the product recall insurance protection your clients need to cover everything from product collection and disposal to business interruption costs and reputation management. Contact one of our specialists today for more information. 

The Jencap Manufacturing Insurance Team

The Jencap Manufacturing Insurance Team

At Jencap, our brokers know that when it comes to insurance for the manufacturing industry, a one-size-fits-all, massed-produced option just won’t do. They are experts in understanding the challenges and risks manufacturers routinely face — product recalls, supply chain disruptions, environmental exposures, and more. The Jencap team will work alongside you to customize an insurance solution for your client, no matter their claims history.
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