iPod Lithium-ion Batteries Overheat

Following the recall of lithium batteries in Apple notebook computers in 2006, lithium-ion batteries continue to generate problems for Apple. Three incidents in which iPod nanos have overheated and caused fires lead to a joint enquiry by the Japanese government and Apple in March 2008.

By August, 14 incidents in Japan alone had been reported.  The overheating incidents have been isolated to first generation iPod nanos and potentially to a single supplier of the lithium-ion batteries. At this stage there have been no reports of serious injury or property damage.

 

Unlike Sony’s “Global Replacement Program”, which led to the recall of batteries from Apple, Dell and Toshiba notebooks, Apple has not yet made a full recall of the product but has offered a repair or replacement deal for those who experience overheating problems.

 

The costs to Sony for the 2006 recall were reported to be approximately US $200 million and subsequently Sony’s share price fell significantly. Due to only a few minor overheating incidents and no major recall, Apple’s costs have been minimal to date in comparison.

 

This raises the question will Apple be liable if their product subsequently causes significant damage? And if so, will it be covered by insurance? Or would a recall, which prevents potential future incidents, be covered by their insurance programme?

 

Appropriate Public & Product Liability, Product Recall and/or Product Integrity Insurance should be considered as part of a good risk management program.

 

Sony Lithium-ion Battery Recall

 

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Author

Claim Solutions Pty Ltd

Insurance Policy

Country: - Various

Policy Description: - Product Liability, Product Recall and/or Product Integrity Insurance

Insurer: - Unknown

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