Product liability Insurance

The product liability insurance covers any legal liabilities arising out of products sold causing injury or harm to a third party. This Policy offers protection to manufacturers, distributors, wholesalers& retailers. It safeguards the business by providing cover against such claims, including legal defense costs

Scope of cover
Provides cover against any legal liability arising out to third party Bodily injury, illness, accidental death or property damage which is caused by the consumption or use of the product sold or supplied after it has left insured’s Premeses.The defect in the product may be a manufacturing defect or may be due to faulty packaging, delivery specifications or absence of warning labels/ precautions, instructions as to use of the product etc. This is regardless of the fact whether the product that is insured is the final product or a part of the final product.

The policy covers the sales turnover of the company‐ both domestic and/or exports. The policy is on claims made basis i.e. the claims must arise and be made in writing on the insurance company during the policy period. The policy offers the benefit of Retroactive Period on continuous renewal of policy whereby claims reported in subsequent renewal but pertaining to earlier period after first inception of policy, also become payable.

Key features:
1. The policy can be taken by the manufacturer of any product whether it be the final product or part of the final product
2. Policy is on Claims made basis i.e. the claims must arise and be made in writing on the insurance company during the policy period.
3. Benefit of Retroactive Period on continuous renewal of policy.
4. The sum insured also covers the legal costs involved.
7. Vendor’s Liability Extension
8. Technical Collaborators Liability Extension

Add on covers
North American Jurisdiction clause: The policy can be extended to cover liability arising out of judgments or settlements made in countries which operate under the laws of U.S.A or Canada (which is an exclusion under the policy).

Limited Vendors Liability: The policy can also be extended to cover Limited Vendors Liability for named or unnamed vendors. Limited vendors’ liability means liability arising out of the sale and distribution of named insured products by vendors with original warranties and instructions of use of the product specified by the manufacturers

Sum Insured or Limit of Indemnity
Under the product liability policy, the “Limit of Indemnity” stands for the sum insured. This amount is determined based on two limits which are set for each accident that occurs during a particular policy period. These are- the Any One Accident (AOA) Limit and the Any One Year (AOY) Limit. The Any One Accident (AOA) Limit is the maximum sum payable for an accident etc. The ratio of AOA limit to AOY limit available & can be chosen are 1:1, 1:2, 1:3, 1:4.

Depends on the type of product. Higher the risk of the product, more will be the Premium.
Premiums also depend on the total turnover, countries you export to, coverage limits, policy extensions and deductibles.

Policy excess:
Policy is Subject to a compulsory excess on the AOA limit. Opting for a higher excess qualifies for a discount in the Premium payable.

1. Costs arising out of recall of any product
2. Deliberate, willful or intentional non-compliance of any statutory provision.
3. Arising out of pure financial loss
4. Arising out of fines, penalties, punitive and/or exemplary damages