Calls for more robust risk management to mitigate agains potential bankruptcy
Lockton has warned that the recent spate of product recalls could have signifcant implications for smaller businesses.
Commenting on Mattel's decision to recall 18m toys, Ian Harrison, Executive Director for Lockton's Global Casualty division, said:
"This recall is a significant event for Mattel - but at least they have substantial financial resources."
Harrison said that product recalls could be fatal for smaller businesses without global brands, citing the recent case of a New Jersey importer of recalled Chinese truck tyres.
it has been reported that the company expects to be able to replace about ten percent of the tires before going bankrupt.
In July alone companies including Toro garden equipment, Castleberry canned meats and Washington State beef were forced to recall products.
Harrison added: "The legal and regulatory standards of consumer protection are rising all the time and companies must learn from these experiences and put in place robust risk management planning and recall insurance to protect their businesses against future recalls."