On Aug. 28, 2009, off-duty California Highway Patrol officer Mark Saylor and three family members were in a 2009 Lexus ES 350 on a highway in Santee, Calif., when the car accelerated suddenly and reached more than 100 mph.

An occupant in the vehicle called 911, reporting that the car had “no brakes” before it crashed into another vehicle and then tumbled down an embankment, killing all four inside.

The crash sparked intense media coverage and an unprecedented wave of recalls of Toyota and Lexus automobiles, and hurled Tokyo-based Toyota Motor Corp. into a public relations frenzy.

Unintended acceleration of various Toyota vehicles has led to millions of dollars in settlements and U.S. fines, as well as hundreds of product liability lawsuits against the automaker, scarring its brand and reputation, experts say.

While product liability insurance is a financial backstop for legal losses, product liability issues often thrust crisis management and brand reputation risks front and center, risks for which there is no insurance coverage, experts say.

There are, however, a series of best practices that companies can employ to mitigate such risks, experts say. (see story, page 12)

Since September 2009, Toyota has recalled more than 10 million vehicles worldwide for accelerator pedal, carpet and floor mat flaws that may cause unintended acceleration. Toyota announced its most recent action on Feb. 24, recalling 2.17 million Toyota and Lexus vehicles sold in the United States for floor mats and carpets that could jam the gas pedal.

Toyota has paid three separate civil penalties totaling $48.8 million, the maximum fines allowable by law, to the National Highway Traffic Safety Administration for the way it handled the recall, the NHTSA said in a December statement. The automaker also won approval of a $10 million settlement last month with the families of Mr. Saylor and the others killed in the August 2009 crash.

Toyota's first recall in September 2009 covered 4.2 million vehicles and included the carmaker's top brands—the Camry, Corolla, Lexus ES 350, Lexus IS 250/350, Prius and Tacoma.

In a November letter to consumers, the car company detailed remedies for the unintended acceleration of certain models, including a reshaped accelerator pedal, redesigned driver floor mats and a brake override system “as an extra measure of confidence.”

The second recall, on Jan. 21, 2010, covered an additional 2.3 million vehicles to correct sticking accelerator pedals on certain Toyota models. Under a rare set of conditions, “the accelerator pedal may become harder to depress, slower to return or, in the worst case, stuck in a partially depressed position,” Toyota said in a statement.

The carmaker added 1.7 million more vehicles to the recall due to floor mat problems.

Five days later, Toyota halted sales of all models affected by the Jan. 21, 2010, pedal recall, shutting down assembly lines at five North America plants for one week beginning Feb. 1, 2010, “to assess and coordinate activities,” the company said in a statement.

Eight Toyota models were recalled in Europe on Jan. 29, 2010, to resolve potential accelerator pedal issues, totaling nearly 1.8 million cars. Another 75,000 vehicles were recalled in China, according to published reports.

After the recalls and related sales declines, Toyota's stock closed at $73.49 per share on Feb. 3, 2010, from $91.78 in January.

While Toyota declined to comment on the recall crisis and its insurance coverage, large global manufacturers typically assume high self-insured retentions with excess layers of product liability insurance, experts said (see story, page 12).

At the peak of the crisis in February and March 2010, BrandIndex, a unit of London-based researcher YouGov P.L.C., which tracks public perception of brands in terms of quality, value, reputation, satisfaction and other factors, said Toyota's standing among automakers had dropped from No. 1 to No. 20 out of 28 brands.

Toyota, which has taken several steps that have regained some of that brand value, now ranks No. 5, BrandIndex said.

“It's really been a bit of a challenge over the last few months to get that brand reputation back to where it was,” said Ted Marzilli, senior vp and managing director of BrandIndex in New York.

“Whether or not Toyota will ever be able to do that is really a question right now,” Mr. Marzilli said. “You're seeing companies like Honda and Ford overtake it, so it's not a foregone conclusion that Toyota is going to get back to the top of the list.”

While Toyota has conducted various recalls in the past decade with mild effects to its bottom line, the sudden acceleration recalls presented the automaker with fresh challenges, experts said.

“What went wrong this time was it was a series of recalls about the same issue, and for the first time it appeared that Toyota had to be pressured into recalling the vehicles for repair,” said Gene Grabowski, senior vp and chair of the crisis and litigation practice at Levick Strategic Communications L.L.C. in Washington.

“Until then, Toyota always appeared to be voluntarily conducting the recalls. It raised concerns because it appeared that Toyota had to be pushed into making the recalls that in the past they would have done on their own,” Mr. Grabowski said.

In addition, the intense media environment may have caught Toyota off guard, experts said. “It took them a handful of days before they really got their heads around and their arms around this crisis; and the brand quite honestly had never been in this situation before, and certainly not in recent years,” Mr. Marzilli said.

“Toyota was responsible for about 50% of the problem,” Mr. Grabowski said. “The other 50% is the environment in which (Toyota) found itself. Toyota tried to handle this from headquarters in Tokyo. It took them 24 hours or 48 hours to respond in an instantaneous media world, which put them at a big disadvantage.”

In February 2010, the NHTSA launched an investigation as to whether the Japanese automaker responded in a timely fashion to consumers' safety concerns. Toyota also said it had received a subpoena from the U.S. Securities and Exchange Commission asking it to voluntarily provide documents related to unintended acceleration of Toyota vehicles and the company's disclosure practices.

A New York federal grand jury also issued a subpoena for related documents. The investigation is ongoing.

Mounting safety concerns and prior knowledge of accelerator problems also prompted tough questions for company officials by the House Energy and Commerce's Subcommittee on Oversight and Investigations.

“In recent months, we have not lived up to the high standards our customers and the public have come to expect from Toyota,” James Lentz, president and chief operating officer of Toyota Motor Sales USA Inc., said in prepared testimony during the House subcommittee hearing in February 2010.

“Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good-faith efforts,” Mr. Lentz said. “The problem has also been compounded by poor communications both within our company and with regulators and consumers.”

Rep. John D. Dingell, D-Mich., questioned Mr. Lentz about when Toyota informed U.S. regulators of problems with unintended acceleration, when it began its recall and the number of consumer complaints since 2001.

“I don't know,” Mr. Lentz said.

After the recalls and congressional hearings, Toyota amassed hundreds of lawsuits, including personal injury claims, proposed class actions on the diminished value of Toyota vehicles and securities-related lawsuits. The cases are pending.

The lawsuits against Toyota are different in terms of plaintiff strategies, as personal injury lawsuits, which are handled case by case and are unique per plaintiff, differ from class action lawsuits, which involve multiple plaintiffs and can be costly. Experts say the way in which Toyota handled the recall crisis may play a part during litigation.

“Partial recalls that result in follow-up recalls is harmful to a company's reputation and they frankly don't help in litigation,” said Brent A. Austin, a partner in the litigation department at Wildman, Harrold, Allen & Dixon L.L.P. in Chicago.

Personal injury cases may be covered by product liability insurance, experts say, which is triggered in the event of bodily injury or property damage caused by a covered product—coverage that Toyota likely has in place, experts say.

Securities-related suits may trigger directors and officers liability coverage that Toyota also likely has in place, observers say.

Class actions lawsuits “can be expensive even in a modest context” for defendants, Mr. Austin said. The first line of defense against class action lawsuits, after filing motions to dismiss, is to oppose class certification, he said.

Public perception after the recalls and congressional hearings, along with the lawsuits' publicity, may have increased the class action frenzy against Toyota.

“It is the companies that say, "We didn't do anything wrong; there is nothing wrong with our product,' and give no help to the consumer that can precipitate these class action suits,” said C. Barry Montgomery, partner at Williams Montgomery & John Ltd. in Chicago.

In a filing in federal court in Santa Ana, Calif., Toyota moved to dismiss the class action suit based on a study released by the NHTSA and the National Aeronautics and Space Administration in February of this year. The study concluded that no evidence was found that the company's cars suddenly accelerated due to electronic failures.

While the study's effects on the litigation remain to be seen, a government report has a strong impact “given the fact that it is published and it's out there for the whole world to see, making it very difficult for an individual plaintiff to overcome something like that,” Mr. Montgomery said.

“The problem with the lawsuits was the adverse publicity and the frenzy...to taint Toyota, and the piling on of congressional hearings taking a very aggressive stance against Toyota,” said Michael Hoenig, member at law firm Herzfeld & Rubin P.C. who focuses on product liability and complex litigation. “Toyota had to be worried about its customer base—not the lawsuit. In the legal arena, Toyota can fight—Toyota has gladiators,” meaning it has a large legal team of very experienced lawyers.

Large corporations inherently are perceived as villains during crisis situations, Mr. Grabowski said. Honest, transparent and frequent communications with the consumer that the problem has been identified and will be fixed is essential.

“When you've got a big brand name, you are perceived as Goliath,” Mr. Grabowski said. “David can lie, cheat and steal, throw sand in your eyes, and use a sling and a stone, but they're going to root for him. But that is part of the process when you're managing risk.”