Voluntary Product Recall for Vape Pens by Colorado Cannabis Licensee

by | Sep 27, 2019 | Insurance Claims | 0 comments

Medicine Man Pulls Vape Products with Propylene Glycol or Vitamin E Acetate Off Shelves

 

  • Colorado based Medicine Man issues press release removing vape pens off their shelf if ingredients include propylene glycol or vitamin E acetate
  • Voluntary recalls might be a covered loss on certain product liability insurance policies.
  • Recalling a product will not typically jeopardize the indemnification provision in most product liability policies.  

In a press release, Colorado based cannabis licensee Medicine Man is removing all vape products containing the ingredients propylene glycol or vitamin E acetate.  Vitamin E acetate has been identified by the New York State Department of Health as being linked in their investigation with victims suffering health consequences. 

Product recall covered by insurance?

From a insurance and risk perspective, Medicine Man is taking the prudent step to reduce their potential liability exposure by removing product for sale, if indeed these ingredients are linked to the national health risks associated with vaping.

A “product recall” is typically defined in most product liability insurance policies.  This definition will help determine the type of recall being performed and how the policy may respond.  For example, some policies define product recall based on notification from an authorized government entity versus a voluntary recall.

Depending on the cannabis product liability insurance company, the costs covered for a recall may include notification, transportation, and disposal of product depending on the policy wording.

Does a product recall jeopardize my liability protection?

Not typically.  A product recall demonstrates being proactive and reducing liability for the licensee and insurance company.  Most reasonable insurance companies will view these actions as mitigating your risk exposure. 

If it is determined vitamin e acetate is responsible for the health problems, then cannabis licensees should begin analyzing the many risk factors such as any potential legal basis of the claim or lawsuit, types of damages, other  parties involved, and how their insurance carrier might respond based on the policy wording.