02380 558200 info@aeins.co.uk

Social Media has quickly become the single most effective communication tool for spreading news. Be it stories about the surrounding areas, a worldwide crisis, or even just keeping in touch with a family member, the immediacy of social networking allows us to be kept up to date within seconds.

And it’s not only individuals who take part in social media. Businesses use the internet everyday to share news with their customers; a press release about a new member of staff, a large deal being made, a new product release. And when things don’t quite go to plan, companies can use the internet to keep their customers up to date and give reliable information and instructions for them to follow – such as with a product recall

A product recall is a request to return a particular product to the manufacturer, usually due to the discovery of safety issues. A company recalling a product needs to be immediate and transparent with its information in order to keep its customers from harm. Under the Consumer Product Safety Improvement Act, if regulators feel that a company hasn’t done all it can to notify consumers and ensure that its faulty products are recalled quickly, there can be hefty fines to pay. Because of this, using websites and various social media platforms to spread the word is very useful.

What is the danger in using social media?

Social media is no doubt a greatly effective method of contacting a large number of customers in a short period of time. On the other hand, it can be very difficult to control rumours and speculation passed around sites such as Facebook or Twitter. A confused customer who makes an ill informed comment about the recall on a social media site may spark a torrent of damaging stories which can be disastrous to your brand.

However, if social media is ignored, there is a good chance that consumers will start to speculate and wonder why information is being withheld. Concerns for safety will escalate as rumours spread and change like Chinese whispers. And if these rumours aren’t addressed, your company could be left in financial difficulty.

If you can’t control what happens on social media but also shouldn’t ignore it, how can you protect your business?

The cost of a product recall alone can be very high. Notifying customers, disposing of products and replacing faulty goods is costly – the last thing you need is the additional cost of rumours being passed around the internet.

Your company’s brand and reputation is what leads customers to trust you, yet this trust can be destroyed instantly if a crisis is not managed properly. Product Recall and Guarantee Insurance can include coverage for the significant expense of rehabilitating your brand after damage by social media, plus loss of profits due to a decrease in consumer confidence.

Product recall insurance is a sensible solution to keeping your business protected in the face of unforeseen problems. General liability and product liability insurance will not cover a product recall, which makes product recall insurance a must have for any manufacturing business.