Product liability insurance protects businesses against liabilities arising from property damage and personal injury caused by their business ‘products’.
It is of importance to consider what is a ‘product’ for the purposes of your policy or contract for insurance. It is necessary to note that each policy for insurance may have a different construction on what is deemed a ‘product’. However, the general position is that a product is:
- Anything that has either been manufactured, erected, assembled or installed by your business.
- Includes any products that have been supplied, distributed, imported or exported by you or on your behalf.
It is necessary to consider the limitations of product liability insurance. There are a number of circumstances that are not covered by product liability insurance. Those include situations where a third party suffers economic loss as a result of a faulty product. If a third party suffers a loss because a product it purchases it not operational or does not function to the expectation provided, this is a situation where your policy for insurance will not extend cover to you for such a loss.
It is also appropriate to know when a claim can be lodged for product liability. Generally, the damage must have occurred at a time that your insurance policy is in place and not as at the time the product was purchased in order for the policy to respond to a claim.
It is of utmost importance to take advise on whether you have the correct product liability insurance. Failure to have the correct insurance may result in significant liability if a claim is lodged against a faulty product which your business has manufactured, assembled or even supplied.
If you have any questions or concerns please contact Chamberlains and talk to one of our insurance law experts today.
If you have any questions or concerns please contact Stirling Owen of our Insurance & Dispute Resolution Team on 02 9264 9111