Insurance giant State Farm might be checking its own product recall and liability coverages after the U.S. Consumer Product Safety Commission announced the insurer agreed to a voluntary recall of a promotional toy.
The product, referred to in the notice as the State Farm Good Neigh Bear, is a plush teddy bear dressed in a State Farm t-shirt. It was given away free through company agents and at company-sponsored events from Sept. 2005 through March 2007. Approximately 800,000 of the bears were distributed in the U.S.
The problem, according to the Commission, is that the plastic eyes of the bears can detach, posing a choking hazard to young children. State Farm agreed to voluntarily recall the items when it received a report that an eye had detached and a child had placed it in her mouth. No injuries were reported.
The number of product liability lawsuits have been declining, but they remain an expensive proposition for affected companies and insurers. According to the Bureau of Justice Statistics, from 1990 to 2003, the number of non-asbestos product liability trials concluded in U.S. district courts declined from 279 to 87 trials. However, product liability cases contain one of the highest estimated median damage awards by category at $350,000 a case. Only medical malpractice awards are higher at $600.000 a case.
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