Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause.
A products liability claim is usually based on one or more of the following causes:
- Manufacturing or Production Flaws - a claim that some part of the production process created an unsafe defect in the resulting product.
- Design Defect - a claim that the design of the product is inherently unsafe.
- Defective Warnings or Instructions - a claim that the product was not properly labeled or had insufficient warnings for the consumer to understand the risk.
The claims may succeed even when products were used incorrectly by the consumer, as long as the incorrect use was foreseeable by the manufacturer (or another party in the "supply chain").
In general, product liability claims are not based on negligence, but rather on strict liability. Under the theory of strict liability, a manufacturer is held liable regardless of whether the act was due to negligence or not. It allows recovery for an injured customer (who might be in a difficult position) to prove what a manufacturer did or did not do in its design or manufacturing process.
Product liability insurance is designed to protect the business from claims resulting from accidental death/bodily injury or accidental damage to a property belonging to a third.
Product Liability insurance is designed to cover your Liability at law and compensate for:
- bodily injury to or disease contracted by any person
- loss of or damage to material property
- loss of profits sustained by any person as the result of a claim under (i) and/or (ii) above
and caused by anything manufactured sold or supplied including containers and packaging, anything constructed erected or installed, and anything repaired serviced tested or processed by the Insured or any employee of the Insured within the declared Territorial Limits.
The policy covers the claimant’s costs and insured’s own legal expenses.
The policy is on a ‘claims made’ basis. ‘Claims made’ means that Coverage will respond to incidents arising on or after the policy retroactive date and which are reported during the term of the policy.
- Product recall
- Punitive damages
- Fines and penalties
- Motor vehicle liabilities
- Professional Indemnity
- Directors and Officers Liability
- Pure financial loss
- Employers liability
- Gradual pollution
- War, sabotage and terrorism
A deductible for each and every loss under the policy may be applicable under some sections of the policy.
Period of Insurance
The coverage is usually provided for a period of one year.
Sum Insured Selection
In Products Liability Insurance, the sum insured is referred to as Limit of Indemnity. This limit is fixed per occurrence (Any one occurrence = AOO) and usually has a ceiling on number of occurrences during the period.
Premium rates are based on:
- Type of product
- Volume of sales
- Role of the insured in the process
- Territory involved
- Policy limit of liability
- Policy deductibles
- Your professional experience
Please note that for the easy understanding of the insurance policy, we have highlighted the important aspects. We will be glad to receive your queries and discuss the full set of policy terms, conditions and exclusions.
For more information, please contact Nasco Gulf at +971 4 351 8610.
The damages awarded in these claims include medical costs, compensatory damages, economic damages, and, in some instances, attorneys' fees, costs and punitive damages.
You must alert us of any accident that may lead to a claim covered under the policy, and our team of experts will assist you in the quick settlement of the claim.
Call us as soon as possible, in case of an accident, and our team of experts will guide you through the claim process. For more information, please contact Nasco Gulf at +971 4 351 8610