XL Group announced the launch of a stand-alone automotive parts recall policy, a tailored insurance solution designed for suppliers in the automotive industry. The policy delivers a choice of coverage to respond to the increased exposures and liabilities related to automotive recalls.
Recently, the number of automotive recalls has increased significantly around the world. In the U.S. alone, the National Highway Traffic Safety Administration reported that in 2014, automotive product recalls reached a record high of close to 64 million vehicles, more than doubling the previous record set in 2004.
Mark Hutton, U.K. product recall underwriting manager of XL Group, said: “The rise of global automotive recalls has put vehicle manufacturers under pressure and they are increasingly looking to push the liability down the supply chain. The additional exposure to automotive recalls is creating a demand for a stand-alone product recall policy that addresses the associated financial risk and contractual requirements on suppliers.”
Hutton continued: “We are introducing this product to tackle the growing risks faced by this industry at a time when there remains a lack of insurance capacity dedicated to respond to the exposures. We anticipate demand to grow as we seek to provide the cover that the automotive parts industry increasingly needs.”
The new stand-alone product offers a choice of specific triggers including product safety issues, product guarantee issues and government ordered recalls.
Cover can be purchased on a contractual or overall turnover basis. XL Group will offer this coverage from its London, Asia Pacific and Bermuda hubs.
Source: XL Group plc
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