Product Liability Insurance

Product liability insurance covers the class of insurance for tangible goods or products, which manufacturers, marketers, distributor, wholesaler, retailer and traders become liable to pay legal expenses against third party bodily injury/ property damage liability arising out of the use or consumption of product manufactured, sold, handled, distributed or disposed of by you.

Coverage

• The policy covers all sums (including defence costs) which the insured becomes legally liable to pay as damages as a consequence of:

  • Accidental death/bodily injury or disease to any third party
  • Accidental damage to property belonging to a third party

• The defect in the product may be a manufacturing defect or may even be due to faulty packaging, delivery specifications or instructions as to use of the product.

• Inappropriate usage of the product by the consumer due to absence of/ or wrong labels indicating usage precautions/warnings and warranties or representations made at any time with respect to the fitness, quality, durability or performance or use of "your product."

• The policy covers the sales turnover of the company- both domestic and/or exports.

However, the policy offers the benefit of retroactive date, i.e. a date stipulated in a claims-made Liability policy declarations section as the first date of incidents covered by the policy. The retroactive date is designed to provide coverage for claims resulting from incidents that take place before the current policy term.

Key Benefits

The policy will aid you, as a product manufacturer, to deal with any legal obligations and third-party liabilities that might arise due to an accident --- ensuring that the damage or bodily injuries caused to the third party are duly compensated.

Add on Cover

• Global extension: Policy can be extended to cover liability arising out of judgements or settlements made in countries anywhere in the world.
• Limited vendor's Liability extension: Limited vendor's liability means liability arising out of sale and distribution of named insured products by vendors with original warranties and instructions of use of the product specified by the manufacturers.

Exclusion

The policy does not cover any Liability for product recall, product guarantee, pure financial loss such as loss of goodwill or loss of market. The policy also does not pay for the cost incurred for repairing or reconditioning or modifying the defective part of the product.

Claim Process

In the event of loss, the following are immediate actions to be taken
Intimate the insurer the occurrence of loss, submit a full statement in writing of the claim, provide the nature and extent of loss and also the estimate of loss. Any delay in intimation might jeopardize the claim as the insurer may express an inability in accepting liability of the loss/damage.

• To take all steps to reduce and minimize the extent of loss/damage and liability
• Proximate cause of the loss and assess the type/extent and whether it is within the scope of the policy
• To extend full co-operation to the insurer and the surveyor appointed for completion of the survey work and for proper assessment of the loss
• Produce all such records and proof as may be required by the surveyor or the insurer for arriving at the extent of loss and the liability under the policy
• Provide documents such as claim form, copy of Policy, Notice of claim, demand letter, Incident note, etc.