Recall Exclusion Law and Legal Definition

Recall exclusion is a provision included in some commercial general liability policies that excludes coverage for damages caused by withdrawal, repair, replacement, or loss of use of the insured's product or work, such that the product or work is withdrawn or recalled from the market because of a known or suspected defect or deficiency. This exclusion is also termed sistership exclusion.

The following is an example of a caselaw on recall exclusion:

“The recall exclusion precludes coverage for any damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement adjustment, removal or disposal of: your product; your work; or. impaired property; if such product, work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it.”[Cytosol Labs., Inc. v. Fed. Ins. Co., 536 F. Supp. 2d 80, 92-93 (D. Mass. 2008)]