Hyundai recalls 5,200 Azera sedans in U.S. for airbag sensor issue

DETROIT, Tue Jul 2, 2013 — Hyundai Motor Co. is recalling about 5,200 Azera sedans in the United States to address an issue where the airbag may deploy with less or greater force than needed in an accident.

The South Korean automaker is recalling the 2012 and 2013 model-year cars because the occupant detection system may fail to properly differentiate whether the front-seat passenger occupant is an adult, child or a child restraint seat, according to documents filed with the U.S. National Highway Traffic Safety Administration. The result could be the bags deploying with the incorrect force and that could lead to increased risk of injury.

Hyundai determined that a change in the fabric material on the sensor mat could impact the sensor’s ability to properly classify an occupant, NHTSA said.

A review of warranty claims found several instances indicating that the airbag warning light had illuminated with a diagnostic code for a wet seat, according to NHTSA.

Hyundai will notify owners and recalibrate the airbag system, NHTSA said. Hyundai expects to begin notifying owners in the third quarter.

How to minimize your product liability and exposure through insurance

Shane Moran, vice president, ECBM

Shane Moran, vice president, ECBM

If a manufacturer, distributor or merchant incurs a loss from your product, you need product liability insurance to protect your business. Product liability is generally considered a “strict liability offense” — if your product has a defect, you’re liable.

“Like most things, the devil is in the details. From an insurance perspective, it’s important to look at all of the terms and conditions of your general liability policy,” says Shane Moran, vice president at ECBM.

Smart Business spoke with Moran about the facts of product liability insurance.

What are some product liability claims?

Product claims typically fall into three categories, claims arising from:

  • The manufacturing or production process — opening a can of soup and finding a piece of metal in it.
  • A design failure or hazard — a chair designed with one of its legs significantly shorter than the others.
  • A product that is not adequately labeled as to the potential hazard of the product — the label on a cigarette pack or a warning label on prescription medicine.

Who should have product liability coverage?

Manufacturers are not the only companies with product liability exposure — every company from the manufacturer of the components down to the retailer can be brought into a suit, and potentially has an exposure. A retailer may have an exposure if it assembled or installed the product and didn’t follow the manufacturer’s instructions properly. The retailer also would have a duty to the buyer to test the product for safety.

What possible damages could be awarded?

Your company can be legally obligated for damages to a third party that your product causes. These damages range from bodily injury to property and economic damage, with punitive damages potentially awarded.

You also can sustain loses in terms of recall cost, further product testing, advertising cost to prevent damage to your reputation, and business income and extra expense loss.

Why do some policies cover economic damages, but not punitive or statutory damages?  

When policies cover economic damages, they mean compensation for a verifiable monetary loss, which can include loss of future earnings, loss of business opportunities, loss of use of the property, cost of repair or replacement, loss of employment and even medical expenses.

Punitive damages are awarded for the purpose of punishment, or to deter a reckless decision or action. Typically, they are used when compensatory damages are deemed inadequate. Punitive damage is a tricky area for insurance, as most jurisdictions have ruled that it is uninsurable. You need to examine your commercial general liability policy’s terms and conditions to see whether you have coverage. In most cases, you will find a punitive damages exclusion included.

Why is it a bad idea to underreport sales volume to lower your premium costs?

Most general liability policies are auditable. While an owner may want to use a lower exposure base to keep upfront premiums low, at the end of the day that same owner runs the risk of a large additional premium payment with the audited exposure.

Right after the policy expires, the audit occurs, which coincides with when the deposit premiums are paid. Deposit premiums are usually 25 percent of the total premium, so without using the proper exposure base at the beginning, a company could be looking at a very large outlay of cash in a short time period. This cash flow crunch could cause the cancellation of a company’s insurance for nonpayment.

Most carriers also lower their rates as the exposure base increases. So, by understating your exposure, you could be causing your company to have a higher rate and premium.

What other mistakes do companies make in this arena?

Many business owners think their insurance covers everything. But, for example, you may or may not have a product recall exclusion. The cost associated with recalling a product can be enormous, and you don’t want to find out that you have no coverage when faced with a claim.

If you’re unsure of your coverage, contact your insurance broker and/or risk manager to review the language.

Shane Moran is a vice president at ECBM. Reach him at (610) 668-7100, ext. 1237, or [email protected]

For more information about risk management, see ECBM’s blog.

 

Insights Risk Management is brought to you by ECBM

Honda to recall 871,000 vehicles for roll-away problem

TORRANCE, Calif., Wed Dec 12, 2012 — Honda Motor Co. will recall 871,000 vehicles that could roll away after the ignition key has been removed, including 807,000 in the United States, the company said on Wednesday.

The automaker said a part in the ignition interlock could become damaged or worn, enabling the key to be removed even if the vehicle’s transmission lever has not been shifted into park.

“If the transmission is not in park and the parking brake is not set, the vehicle could roll away and a crash could occur,” the company said in a statement.

Honda said the recall affects 318,000 Odyssey minivans and 259,000 Pilot crossovers from model years 2003-2004, and 230,000 Acura MDX crossovers from model years 2003-2006. The recall also includes 64,000 Honda vehicles outside the United States.

U.S. safety investigators in October opened a probe into the 2003-2004 Odyssey and Pilot after receiving 43 consumer complaints, including several reports of injuries, related to the ignition switch.

GM to recall 15,575 cars to fix safety flaws

DETROIT, Wed Nov 14, 2012 – General Motors said it is recalling 15,575 Cadillac, Buick and Chevrolet cars to correct potential safety flaws.

The recalls, posted Wednesday by the National Highway Traffic Safety Administration, involve 2,949 2012-model Buick Verano, Chevrolet Cruze and Chevrolet Sonic compacts with driver-side air bags that might not deploy in a crash, and 12,626 2013-model Cadillac XTS sedans with rear-seat head restraints that might not lock in position.

The problems could increase the risk of injury to occupants, NHTSA said.

GM said it will replace the steering-wheel air-bag coil on the compact cars and replace the head restraints on the Cadillac sedans.

GM dealers will provide the repairs free of charge.

BMW to recall 7 Series for transmission flaw

WOODCLIFF LAKE, N.J., Mon Oct 29, 2012 – Bayerische Motoren Werke AG’s BMW of North America affiliate said it will recall 45,500 of its 7 Series luxury sedans from model years 2005-2008 to correct a flaw that could cause a parked vehicle to roll away.

BMW said automatic transmissions may not remain in “park” position due to a software problem on cars equipped with keyless ignition and the Comfort Access option.

The cars are designed to automatically shift the transmission to park when the driver presses the Stop/Start button to shut off the engine. In some cases, if the driver presses the button two or three times in succession, the system may shift the transmission to neutral rather than park.

“If the driver exits the vehicle with the transmission in Neutral and the parking brake is not applied, the vehicle may roll away,” the National Highway Traffic Safety Administration said in its official recall notice posted late Friday on its website.

BMW said it would begin notifying owners of the problem in November, but dealers will not be able to correct the software until March.

BMW last week recalled many of the same 7 Series sedans, saying the doors may not latch due to a software problem on cars equipped with both Comfort Access and Soft Close Automatic options.

A model stands next to a BMW 7 series car during preparations for the Moscow International Automobile Salon August 29, 2012. REUTERS/Sergei Karpukhin

Mon Oct 29, 2012 10:33am EDT

(Reuters) – Bayerische Motoren Werke AG’s BMW of North America affiliate said it will recall 45,500 of its 7 Series luxury sedans from model years 2005-2008 to correct a flaw that could cause a parked vehicle to roll away.

BMW said automatic transmissions may not remain in “park” position due to a software problem on cars equipped with keyless ignition and the Comfort Access option.

The cars are designed to automatically shift the transmission to park when the driver presses the Stop/Start button to shut off the engine. In some cases, if the driver presses the button two or three times in succession, the system may shift the transmission to neutral rather than park.

“If the driver exits the vehicle with the transmission in Neutral and the parking brake is not applied, the vehicle may roll away,” the National Highway Traffic Safety Administration said in its official recall notice posted late Friday on its website.

BMW said it would begin notifying owners of the problem in November, but dealers will not be able to correct the software until March.

BMW last week recalled many of the same 7 Series sedans, saying the doors may not latch due to a software problem on cars equipped with both Comfort Access and Soft Close Automatic options

Honda expands North American recall to include more tna 600,000 Accords

TORRANCE, Calif., Mon Oct 1, 2012 –Honda Motor Co. Ltd. is expanding a recall in North America to include more than 600,000 Accord mid-size sedans to address a potential power steering fluid leak problem that could cause a fire under the hood.

Honda is recalling 573,147 Accords in the United States equipped with V6 engines from model years 2003 through 2007, according to documents filed with the U.S. National Highway Traffic Safety Administration. In Canada, the number of affected Accords is 30,058, a company spokesman said.

The addition of the Accords to already recalled Acura TL cars from model years 2007 and 2008 raises the number of affected vehicles in the United States and Canada to 660,086.

The power steering hose in the cars may deteriorate prematurely due to high temperatures, resulting in cracks and leaks that could cause a loss of power steering assistance or smoke and possibly a fire, Honda said.

The Japanese automaker said no crashes or injuries have been reported related to the issue, but one engine fire has been reported.

The company said the updated power steering hose necessary for the affected Accords will not be available until early 2013. If owners feel their cars exhibit symptoms related to a power steering hose leak, they should go to a dealer for an interim repair, Honda said. Owners will be notified by mail next year when the new hoses are ready for installation, but initial notification of the issue will begin later this month.

The parts for the Accords are different from those used in the affected Acuras. In May, the Japanese automaker announced the recall of 56,881 Acuras, including 52,615 in the United States.

GM to recall about 41,000 cars over fuel leak problem

DETROIT, Mon Oct 1, 2012 – General Motors Co. is recalling about 41,000 Chevrolet, Pontiac and Saturn cars in the United States because of concerns that a defective plastic part might cause a fuel leak, according to the National Highway Traffic Safety Administration.

GM’s latest move follows the company’s recall of 473,841 Chevrolet, Pontiac and Saturns in September to fix a condition that could lead the cars to move when the drivers think they are in ‘park’.

Potentially, 40,859 vehicles sold in Arkansas, Arizona, California, Florida, Nevada, Oklahoma, or Texas could be affected in the latest recall.

As a remedial measure GM will notify owners, and dealers will replace the fuel pump module, free of charge, the NHTSA said.

GM recalls nearly 474,000 cars over gear shift problem

DETROIT, Fri Sep 21, 2012 – General Motors Co. is recalling 473,841 Chevrolet, Pontiac and Saturn sedans globally to fix a condition that could lead the cars to roll when the drivers think they are in park, the No. 1 U.S. automaker said on Friday.

GM said it was aware of four crashes that resulted from the problem, but no injuries.

The company said the recall affected Chevy Malibu, Pontiac G6 and Saturn Aura cars from model years 2007 through 2010 and equipped with four-speed automatic transmissions. GM will repair the condition in which the transmission gear position may not match the gear on the shifter.

The recall affects 426,240 in the United States, 40,029 in Canada and 7,572 in other markets.

Dealers will reinforce the shift cable end fitting to prevent that part from fracturing, GM said. Owners will be notified by letter to schedule the free repairs at dealers, and those who have had the work done already will be eligible for reimbursement.

The company also said it was recalling 6,475 Chevy Sonic subcompact cars globally because they might not alert the driver to a faulty turn-signal bulb.

Dealers will reprogram an incorrectly calibrated module for the cars built between May 29 and Aug. 29 at GM’s Orion, Mich., plant.

The recall affects 4,716 cars in the United States and 1,759 in other markets.

GM said it was unaware of any crashes or injuries stemming from the problem. Owners will be notified of the Sonic recall by letter beginning Oct. 3.

Nissan recalls 2013 Infiniti JX35 for faulty fuel gauge

FRANKLIN, Tenn., – Nissan Motor Co. said it was recalling 7,842 2013 Infiniti JX35 crossover vehicles to check for defective fuel gauges.

The Japanese automaker said a faulty gauge in the new luxury crossover could indicate a higher fuel level than actually exists.

The National Highway Traffic Safety Administration said in a filing late on Tuesday that the faulty gauge could cause the JX35 to run out of fuel unexpectedly, increasing the risk of a crash.

In July, the NHTSA said it had opened a defect investigation into the JX35 on possible improper application of the emergency brake.

The probe is not a recall, but could lead to one. About 8,000 JX35s are being investigated for the brake issue.

In its report to the NHTSA on the fuel-gauge problem, Nissan said the fuel transfer tube could be misrouted inside the fuel tank on some vehicles manufactured from Feb. 15 through June 22. The problem has been corrected, the company said.

The automaker said it had notified U.S. dealers of the fuel-gauge problem on Aug. 13 and would begin sending notices to consumers in early September. Dealers will inspect and, if necessary, correct the problem free of charge.

Chrysler recalls 1,661 Dodge SUVs for airbag issue

DETROIT, Thu Aug 16, 2012 – Chrysler Group LLC is recalling 1,661 2013-model Dodge Durango sport utility vehicles in the United States and Canada because certain some airbags may not deploy in an accident.

The recall affects 1,449 of the seven-passenger versions of the SUVs in the United States and 212 in Canada and other markets.

Chrysler, which is majority owned and managed by Fiat SpA of Italy, said some of the seven-passenger versions of the Durango may have been built with the incorrect airbag occupant restraint control module, and in the event of a side impact rear of the second row of seats, the supplemental side airbag inflatable curtain behind that row might not properly deploy. The modules were meant for the five-passenger versions of the SUVs, but were mislabeled, Chrysler said.

Chrysler said it was not aware of any accidents or injuries related to the issue and most of the affected vehicles are still in the hands of dealers.

Chrysler, which will replace the module free of charge, expects to begin the recall in September, according to documents filed with the U.S. National Highway Traffic Safety Administration.