Toyota Motor Corp.'s problems—and potential financial liabilities—continued to mount last week, as litigation related to certain Toyota vehicles grew.

Lawsuits already have been filed in U.S. courts seeking class action status for economic damages suffered by consumers, and the Tokyo-based company also faces personal injury product liability claims related to auto accidents involving its vehicles.

Toyota could not be reached for comment on its products liability coverage, but observers say it would be highly unusual for an automaker to not purchase coverage for such a large exposure.

The Tokyo automaker has recalled millions of vehicles over accelerator pedals and other problems, and according to reports, Toyota officials estimate the total cost of the global recall could be as much as $2 billion.

The sheer size of the recall exposes the company on several fronts, observers say.

“Right off the bat, when you have millions of vehicles involved, you have exposure from a potentially large number of people,” said Michael Hoenig, an attorney in New York at Herzfeld & Rubin P.C. who has defended auto manufacturers in product liability and class action cases.

Other parties, such as auto parts makers that supplied Toyota, also could face claims from Toyota and from those alleging injury from crashes, observers said.

In addition, other types of litigation could arise against Toyota, such as claims filed by automobile insurers seeking to subrogate accident damages and shareholders alleging that directors and officers mishandled events concerning the recalls, brokers said.

“It is more than likely that there will be D&O claims,” said Justin Whitehead, a director at R.K. Harrison Insurance Brokers Ltd. in London.

Plaintiff law firms in the United States already reportedly have filed lawsuits alleging personal injury for specific accidents, while others say they have filed cases seeking class action status and demanding economic recovery for consumers' loss of use of the vehicle and potential lower resale values. Lawyers also have set up Web sites soliciting plaintiffs among Toyota drivers.

Observers say huge car companies like Toyota usually buy product liability coverage.

“I would expect Toyota or any large auto manufacturers are in the market and buying excess liability limits probably into the hundreds of millions” of dollars, said David Pugson, senior vp in the casualty department in London for Willis North America. “I would find it very, very surprising if they weren't.”

Japanese manufactures typically build their coverage layers by purchasing first from Japanese insurers and then going into the global market for additional layers, Mr. Pugson and other sources said.

Japanese carmakers typically have coverage in place for such claims, and it is expected that Toyota has insurance, Mr. Whitehead agreed.

The situation, meanwhile, could impact other automakers purchasing product liability and product recall coverage as insurers increase their scrutiny as accounts renew, Mr. Pugson said. “Anytime there is a loss, the market tends to tighten up a little bit,” he said. “Everyone gets a little more prudent.”

Ian Harrison, a product recall expert in London for Lockton Cos. L.L.C., agreed the product recall market could change.

“We are likely to see more demand for this cover going forward but...this market is likely to harden,” Mr. Harrison said.

Because automobiles have many complex parts and so many cars are produced worldwide, insurance underwriters do not make available all of the product recall insurance capacity large auto manufacturers desire, brokers said. As a result, automakers typically rely on contractual agreements to push recall liability onto their suppliers.

There will be a liability argument—and “a hotly contested one”—over whether the manufacturer of Toyota accelerator pedals did anything wrong, Mr. Whitehead said.

A key question will be whether the faulty part was the pedal manufacturer's responsibility or if it was designed to specifications supplied by Toyota, sources said. In a statement, Elkhart, Ind.-based CTS Corp. said the gas pedals it manufactured were made to Toyota's specifications.

Meanwhile, product liability claims related to the various lawsuits could face challenges, several observers said.

While coverage generally will be available for claims related to physical injuries or property damage in automobile accidents, suits seeking economic recovery for allegations such as the diminished value of cars or the loss of use of cars while under repair could raise coverage issues under product liability policies, observers say.

Attorneys seeking class action status lawsuits filed in several states likely will allege violations of state consumer fraud acts and breach of warranty, Mr. Hoenig and other legal experts said.

“Some (state) consumer fraud acts contain penalty provisions allowing treble damages and some allow for attorney fees. Then when you package all of this into a class action with a large number of vehicles,” the costs can mount, Mr. Hoenig added.

But product liability insurers have taken the position that their policies cover claims where there is bodily injury or property damage, but not the economic damages sought in class action cases, said Brent R. Austin, a product liability defense attorney at Wildman, Harrold, Allen & Dixon L.L.P. in Chicago.

“Those (economic damage coverage) issues are getting litigated pretty frequently now,” Mr. Austin said.

“In our experience, a products liability carrier will likely take the position that unless a resulting accident has taken place, there is no "occurrence' under the policy and coverage is not triggered,” said David Dietsch, vp-claims manager for Lockton.

Toyota's recalls may actually provide a defense against the economic losses alleged in class action lawsuits, attorneys said.

The purpose of a recall is to correct the defect and avoid class action exposure, said C. Barry Montgomery, a product liability defense attorney at Williams Montgomery & John Ltd. in Chicago. “Toyota has done a recall and, therefore, where are your damages?” he asked rhetorically.

Toyota also is likely to see demands made by auto insurers who will now cull through past and future accident claims to see whether they resulted from manufacturer defects, said Mark Bunim, an attorney who mediates commercial insurance claims at Case Closure L.L.C. in New York.

Culling through claims after a recall is standard practice, a spokesman for Allstate Corp. said.

Michael Bradford contributed to this report.