Who is actually taking the risk of a huge loss of a company, such as mass recall for a car or large scale oil spills, if it is not insured by an insurance company?

The loss when a company faces a recall of a car, for example, not only affects the financial position of the company but it comes with reputational risks also. The financial profile completely changes, its performances in the market are impacted.

So, the most affected are the major shareholders, as they have to face losses in case of a huge downturn for the company, If the share is listed then it probably plummets affecting the stockholders and investors.

Management and operations could be at fault and hence the risk of complete transformations and changes could e inevitable.

If the company doing the recall is small, it would be affected adversely as there is a lack of cash flow for them with less brand recognition.

Large scale oil spills directly affect the market holders of that share and the company, as the loss would be directly absorbed by them. The finances would directly taken out from the cash reserve of the company as it has no insurance of any kind.