The Client and Its Challenge
Paint sold to an auto manufacturer and applied to 20,000 vehicles started to peel. The auto manufacturer was temporarily forced to close one of its assembly facilities and pull vehicles from dealers, while considering a large product recall. Estimating that it would incur more than $100 million in damages, the auto manufacturer wanted full compensation from the paint manufacturer.

Given the claims being made by the auto manufacturer, the paint manufacturer wanted to ensure that damages were accounted for properly before agreeing to any type of payment. Therefore, it sought assistance from the Risk Consulting Practice at Marsh.

The Risk Consulting Solution
The Forensic Accounting and Claims Services (FACS) team quantified the actual damages incurred by the auto manufacturer, prepared proper documentation and insurance claims packages, and recommended damage settlement strategies.

Since the automaker was a major customer, the paint manufacturer wanted to ensure that the loss-reporting process did not interfere with ongoing business, nor affect its long-standing relationship with the company.

To alleviate these concerns, FACS served as the interface between the client and the auto manufacturer, creating a non-confrontational atmosphere conducive to negotiation.

Results
The two manufacturers reached an equitable settlement, and their existing business relationship remains intact.

FACS is now managing the insurance recovery process for the paint manufacturer. This process has become much more efficient as the insurance companies recognize that FACS has already vetted the damages and has prepared a comprehensive and well-documented claim.