Summary:  If you own a Ferrari, you will likely be receiving a recall notice. Vehicle recalls are nothing new, practically anyone who's owned a vehicle has experienced some type of recall. In this recall, practically every Ferrari sold since 2005 is being recalled for potential brake failure, with the only exemptions being the 575M Maranello, 599 GTB, SF90, and the new 296 hybrid. While the National Highway Traffic Safety Administration reports that the recall affects some 23,555 cars in the U.S., this will still involve a great deal of expense, from the expenses associated with researching current owners, sending notices to owners and dealers, fixing the problem, and the associated down time in labor while the focus is on repairs rather than new vehicle manufacturing and current service requirements, plus any reputational costs if the recalls lead to decreased consumer confidence and company credibility.

The problem leading to the Ferrari recall is with the cap of the brake fluid reservoir. The cap is designed to vent pressure if necessary, but if the venting fails to happen it causes a vacuum to build up, leading to possible leakage of brake fluid. Without brake fluid in the brake lines, the car will be unable to slow down or stop, unless of course it crashes against something. The fix is relatively simple, installing a new brake fluid reservoir cap and a software patch that lets the driver know if the brake fluid reservoir is low. (Ferrari has advised if this happens, the driver should immediately pull over that have the car towed.)

Product Recall and the CGL

Many manufacturers fail to realize that their commercial general liability (CGL) insurance policies typically will not cover any of the costs associated with a product recall. Although a particular company's insurance coverage depends on the language in its individual policies, the standard, unendorsed CGL policy CG 00 01 specifically excludes many costs and expenses related to the recall of defective products. As such, Ferrari will bear the brunt of all costs if they are covered by a standard CGL policy, as there is no coverage in that policy for product recall, and the damage to property exclusion.