Product Liability Insurance

What is Covered/Excluded?

Product liability insurance protects you or your busines against the legal liability to pay damages for death, injury or damage caused by defects in products you design, manufacture or supply. Insurance should also cover solicitors' fees, court expenses, damages and the claimant's costs should they win.

What is Covered

Product liability insurance covers the legal liabilities established in the The Consumer Protection Act 1987. Legal action by people who are injured by defective products is possible and they can sue for compensation without having to prove the producer negligent, provided that they can prove that the product was defective and the defect in the product caused the injury.

Individual policy terms will vary and you should seek legal or professional broker advice if you are not familiar with product liability insurance. These are some inclusions you may require.

• Claims for faulty goods up to a maximum amount each year
• Damages for death, injury or damage in respect of injury to any person or loss of or damage to material property caused by products supplied
• Solicitors / Lawyers / Barristers and witnesses costs
• Court costs and expenses
• Claimant's costs
• The cost of having to recall a product
• Compensation to the insured for each day in court that attendance is required
• The manufacturer has gone bust
• Products using your brand name
• Products you maintain, restore or alter
• Products where the manufacturer is unknown

What are the Usual Exclusions

Individual policy terms vary and you should seek legal or professional broker advice if you are unfamiliar with product liability insurance. These are some basic types of exclusion.

• If the product or service you supply is substandard
• If you fail to comply with safety standards
• If you fail to provided safety information (provided by the manufacturer) to the customer
• If you fail to store products in an unsafe manner
• Gradual pollution damage and pollution damage caused by sudden and unforeseen events
• Policies may be endorsed to exclude the "efficacy risk" i.e. where damage is inevitable if the product fails to perform its intended function e.g. rust inhibitor, fire alarms.