Product Liability Insurance
Product Liability insurance for your company’s products
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A manufacturer or a trader can fall victim to complicated and expensive law suits due to a possibility that a product could cause damage to a third party. Product Liability insurance is very important if you have a manufacturing unit.
The most at risk products are those that are generally used, touched or consumed. If you have a business which manufactures food products, toys and so on make sure to avail product liability insurance. There is also a protection against liability claimed by third party due to business or its employees' negligence.
A product liability policy covers claims, which the insured becomes legally liable to pay to third parties because of bodily injury or property damage arising out of the use or consumption of products manufactured, sold and /or distributed by the policy holder.
As a manufacturer supplying products, is always susceptible to the possibility that your product could cause damage to a third party – either property or a person. A small defect could open you up to massive claims.
The amount of coverage your business needs depends on:
Pricing of a product liability policy depends on:
Insurance costs can also be reduced by mitigating your risks or by instituting certain quality control procedures at your company. Identifying, eliminating and mitigating the risks can help protect you against future losses and can also lower your premiums.
In many countries product liability is a statutory requirement.
It is also possible to customise coverage for your needs by combining multiple liability covers; such as a product liability and errors & omissions, or commercial general liability and product liability
Perilwise will help you manage all your risks and customise a cover for you, ensuring all aspects of your liability risks are addressed.
A Product Liability policy covers all sums (including defence costs) which the insured becomes legally liable to pay as damages because of:
Arising out of any defect in the product manufactured by the insured and specifically mentioned in the policy, after such product has left your premises.
Coverage is written on a claims-made basis, meaning a Product Liability policy provides coverage for an injury or loss if the claim is first reported or filed during the policy period.
However, a product liability 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 prior to the current policy term.
Renewal claims-made policies usually have the retroactive date of the first policy issued to the insured. When this is not done, there is a gap in coverage.
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