Lockton says Toyota's product recall has put spotlight on insurance cover

Toyota's product recall of faulty cars has sparked an increase in product recall cover, says Lockton.

In a report on the state of the product recall market, called Supply and Demand Growing for Product Recall INsurance, Lockton's Ian Harrison said: “The interest by buyers in this insurance protection has steadily increased with the recent Toyota recalls sparking even more discussion.

“We have seen a steady growth in both supply of insurance capacity and expertise in this area, so buyers have attractive options.”

Harrison added: “The increase in both supply and demand for recall insurance is a very good sign of a healthy market.”

The Lockton report notes that there are eight lead insurance markets, primarily based in London, that offer a variety of policy wordings, response consultants and different industry specialisations.

Harrison said that this provides a level of choice and competition not seen before for primary product recall and contamination risks. On an excess basis, capacity remains available allowing programmes of $200m plus to be placed for catastrophic exposures if required.