Importance of Recall Insurance

Brokers Can help Growers Minimize Losses

By Jessica Theisman, Associate Editor

California Ag Today recently met with Caitlin McGrath, the national product recall and contamination risk consultant with Lockton Insurance Brokers. Insurance is needed for California growers in case of recalls and contaminations. Lockton feels the most important part of finding the right recall insurance is the consulting element.

Caitlin McGrath, Lockton Insurance Brokers

“Now, what I think is the most important part of insurance coverage is the consulting element,” McGrath said.

These are consulting services that are available if you are a recall or contamination insurance purchaser that allows you access to specialists during and before incidents. One of the struggles that McGrath is noticing is that the quality assurance folks she speaks to are not insurance buyers.

“They are the ones finding out the information about all these services that are available, and it’s not always getting down into the field,” she said.

Preparation in the case of recalls or contamination is important.

“Fan Favorite, as I call them, do a lot of really great work on behalf of a lot of our clients,” McGrath said.

Some of that work can be Hazard Analysis Critical Control Point (HACCP) training and mock recalls. Financial costs are rising due to the increasing number of recalls.

“We believe that that’s the effect of [the Federal Information Security Management Act or] FISMA. They are getting larger in financial cost, and that has to do with the amount that is being recalled and the implications in terms of publicity,” McGrath said.

Recall plans need to cover all of the elements, not just mock recalls.

“The internal message is just as important and knowing who is going to handle what within an organization. Planning and practicing that is really critical to help mitigate if there is a problem,” McGrath explained.

“Having directives around the use of social media as an employee of an organization is very important, but just one department not talking to another is going to have a huge part in this,” she said.

Buying product contamination insurance is expensive, but necessary. Since McGrath started, the number of brokers has nearly tripled.

“I think that not having insurance is now the outlier, so I think the majority of folks are still buying,” she said.

FSMA Deadlines and Details

Aspects of the Food Safety Modernization Act (FSMA) Explained

By Brian German, Associate Broadcaster

 

As many 2011 Food Safety Modernization Act (FSMA) provisions near their deadline for the first step in compliance, the U.S. Food and Drug Administration (FDA) announced an extension for many aspects of the new rules to allow growers and processors more time to clarify certain provisions to ensure compliance. Jon Kimble, food safety services manager with Sacramento-based DFA of California, a non-profit trade association formerly called the Dried Fruit Association, weighed in on several FSMA provisions and compliance.

Jon Kimble, food safety services manager with DFA of California, FSMA
Jon Kimble, food safety services manager with DFA of California

“The Preventive Controls Rule is the biggie that came out. This rule is largely based on the existing Hazard Analysis Critical Control Point (HACCP) structure that the food industry is familiar with, but with some slight modifications and specifics that are unique to the regulation,” noted Kimble. HACCP is an international standard that defines requirements for effective food safety control from biological, chemical, and physical hazards in the production processes that could cause the finished product to be unsafe.

The Preventive Controls Rules for Human and Animal Food was enacted September 18, for large operations. Small and mid-sized companies will have until September 2017 and very small companies have until September 2018.

 

The Produce Safety Rule, another critical part of the Food Safety Act that was published last November, provides farm standards for the growing, harvesting, packing, and holding of produce for human consumption.

The Produce Safety Rule will come into effect for large farming operations within the next month.

 

Other portions of the act include the Foreign Supplier Verification Programs (FSVP) for Importers of Food for Humans and Animals and Accredited Third-Party Certificationwhich relate to imported food products. “There are some regulations that you have to comply with whether you are a food processor or a broker importing food,” Kimble explained.

Finalized earlier this year, the Sanitary Transportation Rule pertains to service scenarios where foods are exposed and not packaged. This rule covers food transported in bulk; vehicle cleanliness, design and maintenance, temperature control; prevention of the contamination of ready-to-eat food (from touching raw food, non-food items in the same load or previous load, and cross-contact with food allergen); training of carrier personnel in sanitary transportation practices; documentation of the training; and maintenance and retention of records.

The Sanitary Transportation Rule has a compliance deadline of April 2017 for large companies.

 

FSMA also includes the Intentional Adulteration Rule, which “relates to what we would traditionally call food defense or security measures to prevent intentional contamination of the food supply,” Kimble said.


Founded in 1908, DFA is one of the oldest food safety companies in the U.S. that provides commodity inspection services and support to packers, processors and exporters in the dried fruit, tree nut, and kindred product industry through commodity inspection, the Red Seal Program, and the Export Trading Company (ETC)

Safe Food Alliance, a new division of DFA of California serves as a resource to the food industry for any and all food safety practices. Services include food safety training and consulting, laboratory testing and analysis, and third party certification audits conducted by Safe Food Certifications, LLC.