Lots of independent tire dealers sell foreign-made tires as part of their multi-brand strategy.
We're guessing many haven't thought much about whether their foreign tire suppliers and tire importers have product liability coverage on their off-shore-made tires.
Would tire retailers be surprised to discover they could be wide open to a lawsuit? Probably. Should they be worried? You bet.
Needless to say, a product liability suit could prove financially devastating to a dealership. All it might take is one tire involved in a vehicle accident. Then it's too late to check if the presumed insurance security blanket is in place.
The question of adequate coverage is one that dealers should be asking of their tire suppliers.
We're not talking about the world's major tire manufacturers, which import tires into North America. As the story on the front page points out, these firms are well covered with liability insurance that would indemnify a retailer in the case of a tire-related accident.
But there is legitimate concern about offshore companies hailing from, say, China or Eastern Europe.
The question tire dealers need to ask is whether that growing number of smaller, foreign tire makers, with which they are doing business, are adequately covered should a tire-related accident occur.
If that happens, the last thing a dealership wants is to be dragged into a product liability lawsuit because one of its offshore tire suppliers, or the tire importer, doesn't carry liability insurance that applies to the U.S. and Canada or isn't fully covered.
The issue has prodded at least two dealer groups to look into the insurance angle. The Tire Industry Association (TIA) as well as the North Carolina Tire Dealers & Retreaders Association both have commissioned articles on this topic for their respective memberships.
As Gerry Cecil of Universal Underwriters Insurance Co., TIA's preferred insurance carrier, explained: ``Product liability claims may end up being your own if you are the only U.S.-based part of your foreign manufacturer partner's operation.''
The tire industry continues to become more global and many dealers are looking to offshore brands as possible lower-cost alternatives to pricier name brands in their never-ending quest to boost profitability.
Tragically that could dissolve in a moment if you're caught with your insurance down.
To protect themselves, dealers should demand proof of insurance coverage from their foreign tire suppliers and import companies, keep insurance certificates on file and receive a 30-day notice of the policy's cancellation or non renewal.
Being forewarned is forearmed.