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Aon Product Recall & Contamination | Crisis Management
Exposure and Coverage Overview
Automotive Product Recall Risk Management & Insurance SAA March 27, 2019
Mike Stankard Automotive Industry Practice Leader
2 Prepared by Crisis Management Proprietary and Confidential | 2019 ed.
Trends for Product Recall Insurance
Contractual Compliance
• Primarily European supply/ OEM Contracts • Increasing Trend in U.S. Contracts
Financial
• Earning Stability / Balance Sheet Protection • Recent emphasis by OEMs of intended chargebacks • Interested in risk transfer at low attachment point
• Catastrophic Protection • Mid-Large Tier 1’s
Strategic / Enterprise
• M&A Related • Board Governance
Aon Risk Solutions Nexteer Automotive Product Recall Renewal Strategy – 3.27.18 3
Covered Losses - Options
1st Party Recall
• Recall costs • Repair, replace, refund of product • Consulting costs • Defense costs
3rd Party Recall
• Recall Campaign costs • Labor for repair, replacement or refund • Un-install / re-install Labor cost
3rd Party Financial
• Financial loss
4 Prepared by Crisis Management Proprietary and Confidential | 2019 ed.
2014-2018 Product Recall & Contamination Insurance Capacity
5 Prepared by Crisis Management Proprietary and Confidential | 2019 ed.
Contract specific Product specific Customer specific All products Captive utilization / participation Catastrophic high retention /limit program
Programs designed around specific exposures Retention levels set to risk tolerances Ample capacity to build large limit program Market access driven by Risk Management goals Premiums driven by exposures covered Ability to leverage Global GL program with London
placement
Coverage Offerings Customized to meet the insured’s goals