Which class of insurance covers a toy manufacturer for financial losses due to a safety issue with a toy?

The class of insurance that specifically covers a toy manufacturer for financial losses resulting from a safety issue with a toy is product recall insurance. This type of insurance is designed to help businesses manage the costs and financial impacts associated with recalling products that are found to be defective or pose a safety risk to consumers.

In the scenario of a toy safety issue, product recall insurance would cover expenses such as notifying customers, retrieving the recalled toys from store shelves, and possibly compensating retailers or consumers for the inconvenience or harm caused. This coverage is crucial for manufacturers in protecting their financial stability and brand reputation in the event of a product-related crisis.

Other types of insurance, such as business interruption insurance, provide coverage for lost income when a business cannot operate due to an unforeseen circumstance, while contingency insurance typically covers specific unexpected events rather than ongoing risks like product safety issues. Products liability insurance does provide protection against claims related to injury or damage caused by a product, but it does not cover the manufacturer’s own costs related to the recall process itself. Thus, product recall insurance is the most appropriate choice for addressing the concerns related to safety issues in this context.