Product Liability Insurance

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  • Coverage for manufacturers, sellers and distributors
  • Get quotes from leading insurers such as Tata AIG, ICICI Lombard, Bajaj Allianz and New India Assurance
  • Cover third-party bodily injury and accidental death
  • Damage to third party property is also covered
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Advantages of Product Liability Insurance

Worldwide Coverage
Product liability insurance offers worldwide protection hence covers legal liabilities arising out of judgement and settlement made in any country by protecting your business worldwide.
Defense Cost Cover
Product liability insurance covers the range of expenses occurring due to a defective product. Some of them include overseas litigation, covering exports when domestic turnover is covered, and defence costs.
Comprehensive Protection
Product liability insurance covers a wide range of risks to your product due to which liability may arise. These include any defects in product, packaging defect, improper use of product or wrong user manual.
Affordable Premium
Product liability policy is available at affordable premium. You can customise the cover according to business needs by choosing from various add-ons such as vendor liability cover and technical collaboration liability cover.

Benefits of Product Liability Insurance

Third Party Injury Cover

  • Product liability insurance in India protects the insured against the liability arising out of third party bodily injury or death resulting directly or indirectly due to product manufactured or supplied by the insured.
  • Third party product liability insurance will also cover you if the people got sick due to toxic materials used in your product.
  • Product defect or package defect compromising the safety of the product and causing injury to the third party is also covered.

Property Damage Cover

  • Third party product liability insurance policy will cover liability and legal costs arising due to damage to the third party property due to malfunctioning of your product.
  • Accidental damage to the third party property due to the defective product once it has left the insured premises can be covered.
  • The policy will pay for the all the costs in defending the claim and settlement costs as well.

Additional Extensions

  • There are many extensions such as global extension, limited vendor liability and technical collaborator liability extension, which can be included in the product liability insurance policy on paying a little extra premium.
  • Liability arising out of the distribution of product by named or un-named vendors can also be introduced under the policy.
  • Product recall and product guarantee can also be introduced in the product liability policy.

FAQs

Product liability insurance coverage offers protection to the insured against the legal liability claims arising out of third-party property damage or if they get injured by a product manufactured or supplied by the insured. The policy indemnifies the settlement costs and the defence costs, up to the sum insured of the policy. Also, business loss, recall and replacement cost of the product is also paid by the policy.
Product recall is the cover under which the policy compensates for the costs associated with recalling the unsafe or defective products from the market which may cause bodily injury and property damage due to their use. It is not covered in basic product liability insurance. But you can include this coverage by placing a special request and paying an additional premium.
All types of product defects and problems such as defects in finished goods, errors in delivery specification, the initial design of the product, manufacturing flaws, defective instructions and warnings, and faulty packaging of the product compromising the safety of the product are covered under this policy.
Generally, willful acts, deliberate damage and intentional activity are not covered by the policy. Any illegal activity and violation of regulatory laws are also exclusions under product liability insurance. Other exclusions under this insurance include pure financial loss such as loss of goodwill or loss of market, fines, penalties and punitive damages.
In order to initiate the claim settlement process, you should intimate us about the claim as soon as you receive court notice. We will further notify this to the insurer and will initiate the claim process. The insurer will then arrange the lawyer for defending the case. In the meantime, you should provide duly filled claim form and other relevant documents as required by the insurer.
In case of a claim, the policy will reimburse you the cost of defence and investigation of the claim which includes lawyer's fees, attorney's fees, and court costs. Settlement costs such as repair and replacement costs if the property is damaged and medical costs in the case, if someone is injured, will also be indemnified by the insurance company in case you lose the case.
Product guarantee expenses such as the cost of replacing, reworking and recovering faulty products are generally not covered in the basic product liability policy. In order to cover such expenses, you need to include the product guarantee add-on in the policy by paying the marginally extra premium. Remember to mention this before buying the product liability policy.
In order to ensure claim settlement, you should ensure that the claim form is duly filled and all the required documents related to claim incident are submitted to the insurer. Also, you should not avoid any willful or illegal activity by which the claim may arise. You should also make sure to declare important information in the proposal form in order to avoid claim denial.
The product liability insurance cost depends on various factors such as the type of business, total turnover, coverage limits and type of the product. More risky products will have more premium and vice-versa. For example, the premium for chemical and cracker items will be higher than shoes and paper items as their risks are higher. The premium also depends upon sum insured and the additional extensions you choose.
In order to get product liability quotes, you need to fill the above form or you can directly call us. Then you need to provide some basic details of your business so that we can design the policy according to your requirements. Then we will have rounds of negotiations with the insurer on your proposal and later you will be provided with the best comprehensive quotes.
In order to reduce the product liability insurance premium, you should try to reduce the risks of the product. This is because the risk of the product directly impacts your premium. You can do this by implementing proper quality controls procedures, implementing safety manuals at your company. Identifying and eliminating the risk can help you minimise the cost.
You should choose the sum insured of product liability policy according to your requirements by analysing potential business risk and the cover should be also based on the product you manufacture or sell. You should also consider the possible amount of claim size if a third party gets hurt, or their property gets damaged due to your product.
The product guarantee insurance indemnifies the insured for all the costs of replacing, repairing and reworking of the product when it does not perform as expected, when sold to end users, due to its faulty design or defect in manufacturing. Direct consequential losses arising out of a defective or harmful product is also covered under product guarantee.
Yes, whether you manufacture, distribute or if the name of your company is on a product, you will be legally liable in case of an untoward incident arising from the use of the product in question. Therefore, to save your company from any kind of financial loss as a result of such expensive payout, you should consider buying product liability insurance.
If you are in the business of designing, manufacturing, supplying and distributing a physical product, then you should buy the product liability insurance. This is because you can get sued by the third party if your product is responsible for their property damage or bodily injury. This policy will protect you from the lawsuits arising from such a faulty product.
While it is not a legal requirement to have product liability insurance, it is recommended to buy this policy if your business is to manufacture or sell the product. This is because, no matter how many precautions you take in the process, you can still be held liable for the losses of the third party. Product liability will protect you against the huge expenses of legal costs and any compensation costs.

Insuropedia

What are the duties of Insured under product Liability Insurance?

A product liability insurance plays an important role by safeguarding the business from various claims which may arise in respect of its products and services. Though the product liability insurance offers coverage; the policyholder has to discharge some duties under the policy as the following...
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What is Product Liability Insurance?

A product liability insurance is a policy which indemnifies the distributor, wholesaler and retailer against various losses or damages which could arise out of the consumption or use of products manufactured, sold or distributed by them.

As a manufacturer who is supplying products, you always deal ...
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Does principle of subrogation apply to Product Liability insurance? How?

Yes, the principle of subrogation applies in the case of product liability insurance as well. If a product liability insurance company settles the claim, the insurer shall be subrogated to all of the policyholder’s rights of recovering the claim amount if the loss or damage happens due to the fault of the...
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