Today, the liability of exporters has increased worldwide. Everywhere, consumers are becoming more aware of their rights and are quicker to exercise those rights by filing product liability suits against exporters, manufacturers, processors. Just one claim could put a severe financial strain on your business – and could even lead to the collapse of the company. In fact, merely the cost of defending an “unsubstantiated“ claim against you can cost several million dollars.
“Don’t let one faulty product destroy your entire business”
WHAT IS PRODUCT LIABILITY INSURANCE?
Product liability coverage provides protection against bodily injury and property damage losses arising out of some defect in the product you sold, manufactured or distributed. Product liability insurance may also provide coverage for claims arising from damages due to providing inadequate instruction for use of the product or a failure to warn on your product label.
LISTED BELOW ARE A FEW EXAMPLES OF PARTIES THAT MAY BE EXPOSED TO A PRODUCT LIABILITY CLAIM:
- The product manufacturer, importer, or distributor;
- A manufacturer of component parts;
- A party that assembles or installs the product;
- The wholesaler; and
- The retail store that sold the product to the consumer
YOU CAN BE HELD LIABLE FOR FAULTY PRODUCTS EVEN IF YOU DID NOT MANUFACTURE THEM. YOU MAY BE LIABLE FOR COMPENSATION IF:
- your business’s name is on the product
- your business repairs, refurbishes or changes a product
- you cannot identify the product’s manufacturer, or the manufacturer has gone out of business
POLICY WORDINGS CAN BE ON THE FOLLOWING BASIS :
- Injury to third party persons or damage to third party property arising out of products sold or supplied.
- Cover for defective products supplied.
- Financial loss incurred arising from a defective product for which the company is legally liable. This would be a financial loss outside any injury or damage.
- Cover for failure for the product to perform the function for which it was manufactured.
- Recall Expense Extension – reasonable costs necessary in recalling the product such as communications including radio announcements and printed advertisements, the cost of shipping the Insured’s products from any purchaser, distributor or user to the place or places designated by the Insured and the extra expense for rent or hire of additional warehouse or storage space.