The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues, including recalls, product liability and warranty issues. For further explanation, see Note 9. Contingent Liabilities below.

For the three and six month periods ended June 30, 2021, provisions primarily related to recall related issues. Cash payments in the three and six month periods ended June 30, 2021 mainly related to the “Toyota Recall” that was settled in April 2021. For the three and six month periods ended June 30, 2020, provisions and cash paid primarily related to recall and warranty related issues. As of June 30, 2021, the reserve for product related liabilities mainly related to recall related issues.

Pursuant to the agreements entered into in connection with the spin-off of Veoneer, Inc. on June 29, 2018 (collectively, the “Spin-off Agreements”), Autoliv is required to indemnify Veoneer for recalls related to certain qualified Electronics products. As of June 30, 2021, the indemnification liabilities are approximately $8 million and included within Accrued expenses on the Condensed Consolidated Balance Sheet.

The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). A majority of the Company’s recall related issues as of June 30, 2021 are covered by insurance. Insurance receivables are included within Other current assets and Other non-current assets on the Condensed Consolidated Balance Sheet. As of June 30, 2021, the Company had total insurance receivables related to recall issues of $126 million. The total product liability reserve currently is less than the product liability insurance receivable because the timing of insurance recoveries does not match the timing of our product liability.


	Three months ended June 30						Six months ended June 30
	2021			2020			2021			2020
Reserve at beginning of the period	$	328		$	54		$	341		$	72
Change in reserve		1			8			5			11
Cash payments		(237	)		(4	)		(243	)		(25	)
Translation difference		11			0			0			0
Reserve at end of the period	$	103		$	58		$	103		$	58