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Friday, July 19, 2024


What is Product Liability?

A product liability policy provides indemnity to the Insured against legal liability to pay for damages and/or Injury arising out of any defect in the products manufactured and covered under the policy.

Product” means any tangible good or property, after it has left the custody and control of the insured, which has been designed, specified, formulated, treated, serviced, altered or repaired by or on behalf of the insured.

Damage” means physical loss or damage to tangible Property.

Injury” means death, bodily injury, illness or disease of or to any person.


Scope of Cover –

This policy indemnifies the insured against legal liabilities to:

pay compensation including claimant’s cost, fees and expenses in accordance with the laws of the country.


Arising out of injury, damage or caused by any defects in the products of the insured, covered under the policy.

The indemnity will apply only to those claims which arise during the period of insurance and are first made in writing against the insured during the PERIOD.


The policy relates only to the insured’s legal liability for bodily injury or loss of or damage to property.


Consequential losses flowing from this bodily injury or loss of or damage to property are covered but consequential financial losses on their own where there has been no bodily injury or loss of or damage to property are not covered.



Defence Costs Clause:

This clause provides for payment of:

costs, fees & expenses of investigation defence or settlement of any claim, and,

the costs of representation at any inquest inquiry, directly connected with the claim.

Subject to:

Being incurred with the prior consent of the Company



Additional Covers

The policy can be extended to cover the following

I) Exports

USA & Canada

Organisation for Economic Cooperation & Development (OECD), countries

Other than above.



II) Vendors Liability : The Policy covering exports may be extended to cover “Vendors Liability”.

Named Vendors

Unnamed Vendors


III) Products Manufactured by Sub-Contractors and/or loan and licence manufacturers on their own brand name.


IV) Technical Collaborators Liability.- The policy can be extended to cover legal liability of collaborator with respect to the technical collaboration agreement between the named insured and the collaborator




Deliberate non-compliance of statutory provisions

Pure financial loss e.g., loss of goodwill

Fines, penalties etc.

War & kindred risks

Nuclear risks

Injuries and/or damages occurring prior to the Retroactive Date stated in the schedule.

Deliberate disregard of the Insured’s technical or administrative management of the need to take reasonable steps to prevent claims.

Injury to employees

Contractual liability

Liability for claims for costs incurred in the repair, reconditioning, modification or replacement of any part of any product which is or alleged to be defective.

Liability for claims for costs arising out of the recall of any product or part thereof.

Liability for claims arising out of any product which with the Insured’s knowledge is intended for incorporation into the structure, machinery or control of any aircraft.

Liability arising out of any product guarantee.

Liability arising out of claims for failure of the goods or products to fulfill the purpose for which they were intended.

Liabilities arising out of products which have left the insured custody or control prior to the retroactive date specified in the schedule of the policy.

Liability for damage to property belonging to the insured or held in trust or in custody or control of the Insured or a person in the service of the insured.


For any insurance solutions, please contact Beacon Insurance at https://www.beacon.co.in/

Insurance is a subject matter of solicitation

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