ABH Nature’s Products Major FDA Recall: What Your Supplement Business Needs to Do Now

If you sell or have sold supplements that were produced by ABH Nature’s Products, the Federal Drug Administration (FDA) recently ordered a mandatory recall on all of the company’s dietary supplements that will likely impact your business.

In the notice provided on the FDA’s website, the update reads that ABH “is conducting a nationwide recall of ALL lots of its dietary supplement products pursuant to a Consent Decree entered by the U.S. District Court for the Eastern District of New York. This recall applies to all dietary supplement products manufactured and sold between January 2013 – November 2019 and all lots of products are included in this recall.”

There are currently 859 businesses and brands listed that are related to this recall of ABH’s products. Each of the impacted businesses is being notified by ABH and instructed to return any remaining stock that was manufactured at it’s Edgewood, New York, facility.

I have many clients impacted by this FDA Recall. I’m going to share how your insurance policies play a role in this situation, and how to ensure adequate coverage for potential future events.

What’s Your Fallback? Commercial General Liability (including Product Liability)

Many of the policies available to supplement companies contains a sub-limit of insurance that will assist in paying for expenses associated with FDA initiated product recalls.

A typical liability policy will have a $1 million limit for liability claims, and the sub-limit for recall expense reimbursement ranges from $10,000 to $250,000, with varying deductibles that apply.

By no means is this limited recall expense coverage intended to pay for defense costs or lost revenue, but rather to “reimburse” for expenses incurred for a recall event.

Each liability policy that contains this coverage will outline the specifics as to what costs are covered and how the coverage on your policy is Triggered.

If you are impacted by this recall event, it is important to review your liability policy to see if you have this added coverage. If so, what’s the language around reporting requirements and how will coverage apply? Each policy is different.

Proactive? Consider Product Contamination/Recall Insurance Policy

There are not a lot of insurance companies to provide this coverage to the dietary supplement industry. There is, however, a limited selection of polices available that can provide $1 million limit for Recalls.

The trigger of coverage on these policies usually must stem from a contamination of products or malicious tampering of products.

Generally speaking, these policies will cover costs related to defense, cost of notifying customers, reimbursement for destroyed product, cost of your customers to recall the product, loss of sales, adverse publicity and rehabilitation expenses.

BE CAUTIOUS—not all product contamination/recall policies will include the language that covers Government Ordered Recalls for contamination. This is often a feature that will need to be added to the policy.

If you have questions relating to your insurance policy and how it relates to this recall, I am happy to speak with you. Set up a call by contacting me directly.

About Chris Morey

Chris Morey specializes in protecting and supporting the growth of Dietary Supplement and CBD businesses, including raw material importers, manufacturers, distributors and retailers. A Certified Sports Nutritionist, he has been active in the health and fitness industry both professionally and personally for over a decade, and he understands the challenges that businesses in this space face. Chris firmly believes that dedication and consistency lead to results, and every day he works to translate that philosophy into partnering with his clients to reach their goals.

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