Guiding a National Food Supplier Through a Major Recall Event

Background & Challenges

A food supplier introduced a contaminated ingredient that contained listeria into the US food supply through many food manufacturers in different forms. The recall was widespread in all 50 states. There were several insurance policies that had potential recovery and, in the beginning stages, the total liability from the event was unknown as customers began to pull products off the shelves and many customers had not presented damages for several months following the recall.


BDO led the recall recovery process for the supplier and coordinated with both internal and external counsel as well as the insured’s broker in aligning multiple policies with differing coverages and limits to maximize recovery. BDO professionals also performed an exposure analysis to estimate the potential financial impact as the ingredient was sold and used by more than 90 downstream distributors and manufacturers. BDO professionals led the claims recovery process by being the main point of contact for customers, evaluating customer claims for damages, liaising between the insurance companies’ accountants for settlement of claims, acting as the expert witness for claims that went into litigation, and preparing the insured’s first party property damage, extra expense, and business interruption claims.

Client Impact

BDO took what felt like an unmanageable, black swan event for this ingredient supplier and guided them on a path to financial recovery and certainty. The loss exposure analysis prepared using Monte Carlo simulations was used at the Board level and allayed investor fears of how the recall could bring down the company. In what was a multi-year recovery event, BDO was a guiding advisor throughout the process. BDO’s analyses and clear communication approach maximized insurance recovery for our client and mitigated financial damages from third-party claims that had not been fully supported.