The Client and Its Challenge
A manufacturing company, through a number of acquisitions, created a portfolio of businesses that included several with product recall liabilities on their balance sheets.

The company was interested in settling outstanding claims. However, it was unsure of the number of outstanding claims, the total cost of these liabilities, and how best to settle them.

As such, it sought out the Risk Consulting Practice of Marsh to help it understand its product recall-related exposures, as well as negotiate a settlement with insurance companies.

The Risk Consulting Solution
Product recall experts reviewed the claims and evaluated their liability and exposure values. After 1,000 outstanding claims were uncovered, the company decided to pursue a mass settlement mediation with one of its insurers.

When the company and its insurer entered into mediation on the claims, another 750 were brought forward. The total claims were valued at approximately $4.2 million.

Results
Through the mediation process, Marsh's product recall experts were able to reduce the amount of the claims from $4.2 million to just $1 million, a record 24 percent of the subrogation amount. This settlement included all claims that were unknown to either party, but had a loss date prior to the date of mediation.

Given the success with this mediation, Marsh was asked to assist the company in negotiating the remainder of its subrogation claims with subrogation carriers.
In addition, Marsh has been asked to support the company on a mass tort claim.