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Why have BMW, Ford, and Honda been recalling their cars?

Why have BMW, Ford, and Honda been recalling their cars?

Since 2008, major car manufacturers like Ford, BMW and Honda have been on a harrowing journey of recalling thousands of cars in order to replace their faulty airbags.

The airbags in question were manufactured by the Japanese automotive parts company Takata. The problem was that they used ammonium-nitrate-based propellant, which caused some of them to rupture and explode, releasing metal shards. This has resulted in over 400 injuries and close to 27 deaths so far.

Thus began one of the world’s costliest and largest product recalls in history, that led to Takata going bankrupt in 2017.

This begs the question - How do companies cover their losses in such cases, which are bound to be significant considering the resources involved in pulling products that have already been released to the public?

By getting Product Recall Insurance!

Product recall insurance policies come in different categories like Automotive, Consumer Goods, Contaminated Products, etc. depending on the type of industry.

  • They indemnify the insured against financial obligations arising out of compensatory damages
  • They cover expenses like replacement costs, disposal costs, restocking costs and labor costs
  • They provide compensation for the loss of profits and help in business rehabilitation
Is your vehicle older than 15 years? Soon, it'll become 8 times more costly to drive it!

Further Reading

Interested in learning more? Read about how companies cover the risk of their products harming the public