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Liability Insurance
 
 

Introduction

Safety and reliability of products are an important concern to consumers, sellers and manufacturers. Faulty products can be hazardous for the consumers' health and property. The manufacturer/ seller of faulty products could be held liable for such damages, exposing themselves to financial losses.

More Details


Scope of cover

    This policy broadly covers legal liability of the insured towards damages to the third party arising due to faulty products manufactured / sold by the insured, liability with respect to:
  • Accidental death
  • Bodily injury or disease
  • Loss or damage to property

  • Legal costs and expenses incurred with the prior consent of the Insurer and within the limit of indemnity.

Sum insured

    Depending on exposure (end users, sales territories, nature of products and turnover), the proposer has to fix two limits of indemnity under the policy:
  • Any One Accident (AOA)
  • Any One Year (AOY)

  • AOA and AOY can be in ratio of 1:1, 1:2, and 1:3 and maximum can be 1:4. It is not permissible to issue the policy with unlimited liability.

Premium

    Premium chargeable depends on the:
  • Risk group (products to be covered)
  • Turnover of products (for proposed period of insurance)
  • Sales territories
  • Limits of indemnity selected
  • Ratio of limits
  • Quality control system and R&D strength of the insured
  • Claims experience

Significant exclusions

    This policy does not cover liability arising out of or in connection with:
  • Product efficacy
  • Product recall
  • Product guarantee
  • Pure financial loss
  • Terrorism, war and SRCC
  • Any professional services deficiency
  • Personal injuries such as libel, slander
  • Fines, penalties and punitive or exemplary damages

Excess

Policy is subject to compulsory and minimum excess of 0.5% of AOA limit

Discount

Higher excess opted on a voluntary basis qualifies for discount in premium.

Main extension

  • Limited named vendor's liability
  • North American jurisdiction clause (covering exports to American countries)
  • Technical collaborator's clause