Changing regulations at the U.S. Food and Drug Administration under the Trump administration may make food contamination risks a higher concern for certain policyholders, and insureds should closely review their commercial general liability and product recall policies for potential coverage, experts say.

While President Donald Trump has touted deregulation efforts across executive agencies, Secretary of Health and Human Services Robert F. Kennedy Jr. is pushing for greater oversight of ingredients at the FDA. These differing views should encourage policyholders to examine their policies and not rely on the potential of less rulemaking and regulatory action, attorneys told Law360.

"I think it's one of those uncertainties where I'm sure some policyholders in the food sector are very relieved that they think they're going to confront less rulemaking and less regulatory action, but I'm not sure they can bank on that," Joshua Gold of Anderson Kill PC told Law360. "And, accordingly, I think they want to make sure that they have their insurance policies ready to go and not just think that they're in a much safer clean environment than they were just a year ago."

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While third-party claims arising from alleged food contamination typically pertain to commercial general liability policies, product recall insurance is another important component of coverage, said Gold, a policyholder attorney.

Serving somewhat as "twin protection" to CGL coverage for food industry policyholders, product recall policies are first-party coverage intended to cover factors like the cost to pull a recalled product off of shelves and the cost to rehabilitate the product, Gold said.

While food and beverage companies are able to access this supplemental coverage, Gold said that like all insurance products, there is a cyclical nature. The product used to be abundant for certain industries, like pharmaceutical companies, but sectors with a high frequency of big, expensive claims may eventually see difficulty in obtaining product recall insurance, he said.

"I don't think you can make an absolute rule that product recall insurance will never be sold to a certain segment of commerce ever again," he said. "But, needless to say, if you have a rash of lawsuits against certain industries, like the food and beverage industries, I think insurance companies will be more selective in who they sell insurance to, how rigorous the underwriting will be.

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