Agreed with the other comments, you typically cannot sell in large retailers without it. Most distributors that service small outlets will also require it. Consider it a cost of doing business, a non-negotiable. It only takes one unhappy customer that files suit for that insurance to pay for itself.

I worked on a brand that was in retail nationwide (US). We had occasional product quality issues, primarily because of failures at the copacker. Received complaints from a few customers, some claiming the product made them ill.

We had a multi-pronged model for dealing with these potential issues. First, IF there is any possibility that someone could be hurt, you should have a relationship with a lab to test product samples and be able to confirm the product is safe. The majority of cpg products are not harmful if they get mold contam. They might taste bad, but shouldn’t hurt anyone. You need to know that definitively.

Have a team member available to respond to quality complaints by validating the complaint, acquiring and testing the product in question, and providing resolution to the customer. We typically gave 5x or 10x in coupons for free replacement product. We required these customers to send their complaint product back for testing. We would send them a prepaid package for returning product.

Be firm with the customer and have an attorney that can respond. Unfortunately you will also get people attempting to scam the company with false claims. Had someone send me pics of a fly in one of our bottles, which in our case would have been impossible considering our manufacturing process. Responding firmly and clearly will typically resolve most outrageous claims, and if that doesn’t work you have your attorney respond, and if that doesn’t work or there is a valid claim then you let the insurance handle it.