The global insurance segment of XL Group plc last week announced the launch of Automotive Recall Plus, designed for the automotive supplier industry in Germany, Austria and Switzerland.
The new product will provide additional liability coverage for the warranty agreements between automobile manufacturers and suppliers.
To heighten efficiency and reduce costs, manufacturers frequently use the same part for numerous platforms. But this practice can also present some risks. In the event that one component, or a group of components, is defective, a compulsory product recall could result in serious economic consequences.
Such product recalls challenge insurers as well as suppliers.
“Until now, in the case of a product recall, neither production costs for faulty products, nor the automotive manufacturer’s internal costs were insured,” says Bernd Oppermann, senior underwriter in international casualty at XL Group. “It was expensive and time-consuming for suppliers to produce replacement parts out of pocket. That is why we are delighted to launch this new solution in Germany, Austria, and Switzerland.”
Automotive Recall Plus is designed for automotive suppliers with professional, proven quality control and risk management. The level of the premium primarily depends on the risks covered.
Oppermann explains: “Because we can calculate the risks individually, we are able to offer tailor-made premiums to suit our clients’ needs. We are offering this product exclusively to new or existing clients with product recall policies, as well as either commercial or product liability policies.”
Source: XL Group