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Mercedes-Benz warns 800,000 drivers of a major defect

Mercedes-Benz warns 800,000 drivers of a major defect

On 4th Jan 2022, Daimler, the parent company of Mercedes-Benz, sent letters to some 800,000 Mercedes-Benz owners warning them of a potential hazard. According to the letters, a technical defect was detected in the luxury cars that could spark a fire.

Mass car defects are unfortunately not an uncommon occurrence. In 2008, cars of major manufacturers like BMW, Ford, and Honda had faulty airbags, leading to hundreds of injuries and deaths.

So, how do companies deal with situations like this?

Through Product Liability Insurance. More specifically, a certain add-on to this policy - Product Recall.

The Product Recall extension to a Product Liability Insurance policy covers all expenses associated with recalling a product when a widespread defect has been detected.

Product Recalls can be incredibly expensive and require huge amounts of resources. Through a Product Recall cover, businesses like electronics companies, car manufacturers, food and beverage corporations, etc. can get reimbursed for any loss or expense incurred while recalling defective products or models.

Additionally, when such product defects end up causing significant harm, injury or even death to the public, Product Liability Insurance can help pay compensation to claimants and also cover legal costs in the event of a lawsuit.

However, in the Mercedes-Benz case, the parts needed to fix the issue were not available owing to a supply chain crisis caused by the pandemic. Hence, the company has not decided to recall the affected cars yet.

For now, drivers have been advised to drive the cars in a prudent manner and reduce usage to the bare minimum.

BMW, Ford, Honda and other car manufacturers' massive decade long product recall

Further Reading

Interested in learning more? Head to our blog on Product Liability Insurance