Magazine article Risk Management

Insurance Industry Sees Little Impact

Magazine article Risk Management

Insurance Industry Sees Little Impact

Article excerpt

WHILE A CRISIS FOR GM, the recall has had little effect on the insurance industry, which does not offer recall coverage for auto manufacturers.

"I am not aware of any insurance implications, because I am not aware that any recall coverage was in place," said Robert P. Hartwig, president of the Insurance Information Institute. "GM has publicly announced its plans to set aside reserves against its first quarter earnings to handle this recall as well as a number of other recalls it announced recently."

These reserves, Hartwig said, suggest that GM plans to finance the costs out of its own pocket and that there is little or no coverage in play.

While product recall coverage for auto manufacturers has not been available, coverage is offered to automotive component parts suppliers and manufacturers. "We are seeing first, second, third and fourth-tier component and parts manufacturers purchasing this coverage," explained Bernie Steves, managing director of crisis management for Aon Risk Solutions in Chicago. …

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