This article is part of the
Global claims review 2022
The growing use of industrial adhesives in electronics and car manufacturing has led to a notable hike in the cost of product liability and recall claims, according to Birgit Vosper, Head of Global Practice Group for General Liability Claims at AGCS. Recent years has seen a marked increase in the use of adhesives to bond components, making repairs more complex and expensive, often requiring the substitution of an entire unit or surrounding.
“As more manufacturers have reverted to the use of glue and industrial adhesives, we have noticed a significant increase in repair costs over the past 18 months. Some repairs are at least 25% more expensive, if not more, due to the use of adhesives,” says Vosper.
The cost of construction liability claims is also rising with quality issues related to products manufactured in some parts of Asia. In particular, a number of construction projects have been delayed due to Chinese steel that failed to meet local quality standards. Companies and insurers often must bear the cost of quality issues as litigation and subrogation claims against product manufacturers in China are difficult to pursue successfully.
“The location of production can be a big factor in claims costs,” says Vosper. “We recently had a claim for a €300mn infrastructure construction project in Germany where the steel from a supplier in China was not fit for purpose. This is an issue we see more and more often.”
