In 2025, we’ve seen a big surge in product recalls, ranging from frozen shrimp to infant formula linked to botulism. This trend isn’t just a coincidence; there’s data to back it up. The Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) have been more vigilant lately, with recalls increasing by about 15% between 2020 and 2024. A US PIRG report from early 2025 even highlighted nearly 300 recalls in 2024 alone, which resulted in about 1,400 illnesses, 500 hospitalizations, and 19 deaths.
Small businesses, especially in the food industry, are feeling the heat. A recall can cost them not just money but their reputation. Unlike large companies, which often have multiple production sites and backup plans, smaller operations can face severe disruption. They may find themselves shut down for weeks or even longer while sorting out issues.
To help, the Food Liability Insurance Program (FLIP) introduced online product recall insurance aimed specifically at small to mid-sized food businesses. This coverage includes expenses tied to both voluntary and forced recalls, with options for $10,000 or $25,000 limits. FLIP recognizes the unique challenges that these businesses face. Kyle Jude, a program manager at Veracity Insurance Solutions, emphasizes the importance of tailored solutions, noting that small businesses often don’t get sufficient protection from standard policies.
Factors driving these increased recalls include rapid production speeds and lack of training for temporary workers. During busy seasons, errors can creep in, leading to mistakes on labels or in packaging. Small producers often rely on a single supplier or handle all production themselves, which means a recall has a much more significant impact on their operations.
Interestingly, it’s not just manufacturers who are concerned about recalls; home-based food producers are also seeking coverage. This shows a broader awareness of food safety risks in the industry.
While the rise in recalls can create anxiety, it offers a chance for businesses to educate themselves. Experts recommend that food entrepreneurs thoroughly review their insurance needs and options when policy renewal time rolls around. Each business is unique, so having the right coverage tailored to specific risks is crucial.
For more information on food safety and recall statistics, you can check the reports from US PIRG.
