Product Liability Insurance

Any business involved in manufacturing, selling, or distributing physical products, including manufacturers, retailers, and wholesalers.

It covers bodily injury, property damage, legal defence costs, and settlements related to defective or unsafe products.

It’s not mandatory in most jurisdictions, but certain industries or contracts may require it.

Typically no, but recall expenses can be added as an endorsement or separate policy.

Yes, it can cover claims related to design flaws that make the product unsafe.

Yes, manufacturing defects causing harm are covered under most policies.

Yes, failure to include adequate warnings or instructions that lead to injury or damage is typically covered.

Physical defects in products incorporating software may be covered, but cyber-related issues might require separate insurance.

Coverage may extend to international markets, but certain jurisdictions like the U.S. and Canada often require a separate endorsement.

Notify your insurer immediately, gather relevant documentation, and cooperate in the investigation.

Yes, legal defense costs are typically covered within the policy limits.

Yes, multiple claims may arise from the same product defect, and they are usually covered within the policy’s aggregate limit.

Contractual liabilities, intentional acts, and known defects are common exclusions.

No, legal fines and penalties are generally excluded.

No, the policy only covers third-party damage, not damage to the insured’s property.

No, product recall costs are typically excluded but can be added as an endorsement.

Yes, policies can be tailored with specific add-ons and limits.

Product Liability covers defects in products, while Public Liability covers third-party injury or damage occurring on business premises.

Yes, coverage can be extended internationally, though some regions may require additional premiums.

Yes, due to the risk of contamination or spoilage leading to customer injury or illness.

Yes, especially if their products involve hardware that could cause physical harm.

Yes, to cover potential claims from adverse reactions or faulty medications.

Absolutely, as defective toys can pose a significant risk of injury to children.

Yes, even small businesses face risks if their products cause harm to consumers.

An add-on that covers the costs of recalling defective products from the market.

It covers the financial loss from products failing to meet performance guarantees.

It covers claims related to a product’s failure to meet specified warranties for safety or performance.

Yes, transportation risk can cover damages occurring while the product is in transit.

Yes, with the right endorsement, costs for replacing or repairing defective products may be covered.

Yes, if your business imports products, it can be held liable for defects in those products.

Strict liability holds a business responsible for product defects regardless of negligence.

It can cover legal costs and settlements related to class actions filed by multiple claimants for the same product defect.

Yes, but you may need to extend coverage to specific regions like the U.S. and Canada.

Yes, exporting products often requires additional coverage or endorsements.

It depends on the policy’s territorial limits, but global coverage is available as an add-on.

The U.S. and Canada have strict product liability laws, and coverage in these regions is essential for businesses exporting products there.

Yes, the EU has stringent regulations, and businesses exporting to the EU should ensure coverage includes these requirements.

Implement strong quality control, regular product testing, and ensure clear warnings and instructions are provided.

It doesn’t reduce the risk but provides financial protection if a claim arises.

Yes, even if all regulations were followed, product defects can still result in liability claims.

Yes, selling online exposes businesses to global markets and higher potential liability, especially in strict jurisdictions.

Limits vary but often range from ₹50 lakhs to ₹10 crores, depending on the business size and product risk.

Per-occurrence limits apply to each claim, while aggregate limits are the maximum payable during the entire policy period.

Premiums are based on factors such as product risk, industry type, claims history, and coverage limits.

Yes, products like pharmaceuticals or electronics typically attract higher premiums due to the greater risk.

It is not advisable. Always inform your insurer as they need to be involved to cover legal and settlement costs.

It may increase depending on the severity and frequency of claims, but this varies with insurers.

If you have an Extended Reporting Period add-on or retroactive cover, claims made after the policy period may still be covered.

Your policy will still respond if your product contributed to the injury or damage, subject to policy terms.

Yes, most policies cover out-of-court settlements as part of the legal defense.

Generally, no. Pure financial losses, such as loss of market share, are excluded.

Multiple claims can be covered, but they will be subject to the policy’s aggregate limit.

Time limits vary by jurisdiction, but most policies require claims to be filed within a specific period after the incident.

Not necessarily. Many insurers offer global coverage, but high-risk regions like the U.S. and Canada may require special endorsements.

Yes, claims in foreign jurisdictions may follow local laws, which could result in different procedures and outcomes.

Yes, especially in cases where products are distributed globally, claims may arise in different countries.

It can, but you may need an endorsement to ensure foreign supplier-related claims are covered.

Yes, as reactions to ingredients or improper labeling can lead to claims.

Yes, due to the high risk of injury or damage resulting from faulty parts.

Food manufacturers need coverage for contamination, spoilage, and third-party bodily injury claims due to foodborne illnesses.

Yes, defects in construction materials can cause significant structural damage, leading to third-party property claims.

Yes, it covers claims related to adverse reactions, defective drugs, or improper usage instructions.

It treats multiple claims arising from the same defect or issue as one single claim, subject to one limit.

Yes, if specified, sub-contractors involved in the handling or distribution of products can be covered.

No, Product Liability Insurance does not cover claims related to intellectual property infringement.

Pollution-related claims are typically excluded unless the policy has a Sudden and Accidental Pollution add-on.

Yes, insurers offer coverage for eco-friendly products, but you need to ensure the risks specific to these products are addressed.

Key factors include financial stability, industry expertise, and customer service reputation.

An accident is defined as a sudden, unexpected, and unintentional event that causes injury or damage to third parties. It may also include repeated exposure to the same conditions that result in such damage.

The product is any tangible property after it has left the insured’s possession, which has been designed, manufactured, sold, or distributed by the insured.

Bodily Injury refers to death, physical injury, illness, or disease suffered by a third party.

Yes, but only if the pollution results from a sudden and identifiable event. Gradual pollution is typically excluded unless otherwise specified.

No, the insurance does not cover damage to the product itself or any costs for repair, modification, or replacement of the product.

No, product recall costs are generally excluded unless a separate endorsement for product recall is added.

Defense costs include all legal fees and expenses incurred in the defense of a claim, which are covered in addition to the limit of indemnity unless otherwise specified in the policy.

The retroactive date refers to the earliest date from which the policy will cover incidents, even if the claim is made later. Any claims arising from events prior to the retroactive date are not covered.

No, fines and penalties are excluded from coverage.

The voluntary excess is the amount the insured agrees to bear for each claim in addition to the compulsory excess. This reduces the insurer’s payout but also potentially lowers the premium.

Yes, if food or beverages provided to employees or consumers cause injury, the policy will typically provide coverage.

Claims made after the policy period can only be covered if the policy includes an extended reporting period.

The control of claims clause gives the insurer the right to take over the defense or settlement of any claim made against the insured.

The subrogation clause allows the insurer to step into the shoes of the insured to recover costs from third parties after the insurer has paid out a claim.

Yes, directors, officers, and employees can be included as insured persons under the policy if the claims arise from their duties on behalf of the business.

Yes, both the insurer and the insured have the right to cancel the policy with proper notice. In such cases, a pro-rated refund may be issued, subject to conditions.

Once the limit of indemnity is exhausted, the insurer is no longer liable for any further claims during that policy period.