Product Liability Insurance

Product Liability Insurance

If you are a Manufacturer or Wholesaler or Retailer of a product which is used by others be it a company or an individual then in that case it is very important for your company to take Product Liability Insurance which will provide you cover against any Legal Liability falling on your company due to Death, Injury or Property Damage to third party caused by a defect in your product. This policy also provides for Defence Cost to be incurred by insured to fight a legal suit being filed by a third-party for the financial loss it incurred due to damage to its property or death/injury sustained.

The Product Liability Insurance policy covers all expenses incurred by insured to fight a legal case filed against it by a third-party due to

1. Accidental disease/death/bodily injury
2. Accidental Property Damage

Product Liability Insurance policy also pays for the legal defence cost in such claims cases.

Policy gives insured cover from Retroactive date if so taken by the insured.

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A Commercial General Liability (CGL) insurance policy covers expenses emanating from the exposure of following risks.

Product Liability Insurance policy covers

1. Defects in finished goods
2. Faulty packaging,
3. Delivery specifications, or
4. instructions to use the product

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Some of the general exclusions applicable to Product Liability Insurance are.

1. Claims before the policy came in to force or retroactive date
2. Non-financial claims (loss of goodwill, etc.)
3. Product recall
4. Product guarantee
5. Product repairing

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The manufacturer or distributor of a product must take adequate cover up to the limit of maximum third-party loss that may occur in any one insured event in this policy.

Policy covers complete Sales Turnover of the company which includes domestic and overseas sales for the insured period.

The Any one Accident (AOA) defines the maximum financial assistance to be provided by insurance company to insured in case of an insured event.

The Any one Year (AOY) defines the maximum financial assistance to be provided by insurance company to insured in one year for all the insured events.

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Following add-on covers are available in Product Liability Insurance policy.

1. Vendors Liability
2. Product recall
3. Legal judgements passed in North America

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The insured can file a claim in Product Liability Insurance under following circumstances.

1. Whenever an insured event like third-party property or bodily injury occurs
2. If insured receives a legal notice for an event that is covered in Product Liability Insurance
3. If the event has occurred in the policy period or after the retroactive date as per policy
4. The claim must be filed in written form by third-party

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Disclaimer – The policy coverage and exclusions are subject to change from time to time and also depend on insurance company. Please talk to us to know the exact terms and conditions applicable.

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