Contract & Property Law

20140501 Aston Martin and others

Product recalls, especially in the car industry, seem to happen more and more often. Hardly a month passes without a major manufacturer calling for vehicles to be returned to the workshops to fix a more or less major problem. And those are just the recalls you read about in the paper. This is ironic considering that these days cars are incredibly reliable. Breakdowns have become very rare, no matter what brand or model. But sometimes things do go wrong. It might be a faulty part from a new supplier, it might be a design flaw due to the increased market pressure to develop new models every two years.

Whatever the reason, when things go wrong and there is a recall, it gets expensive. And whenever things can become expensive, there is an insurance to cover it. Now, these kind of ‘recall insurances’ are interesting because, naturally, the insurer also does not want to pay if, for instance, the manufacturer has been sloppy. So you find clauses about ‘product tampering’, ‘quality control’ and of course, ‘recall costs’ and what that might or might not cover.

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