As a manufacturer supplying products, you must be aware that there are possibilities that your product can cause damage to the third party- either a person or property. Even a small defect can open you up to massive claims. But, no worries, if you get product liability insurance, you can be at ease. As a product manufacturer the policy for you will not only protect your organization from claims, but also cover every legal cost identified for resisting these claims.
A product defect may relate to its manufacturing or faulty packaging, delivery specifications or instructions as to the product’s use. The policy covers the sales turnover of the company- both domestic and/or exports. However, the policy is on a ‘claim made’ basis, which is the claim made in writing on the insurance company during the policy period.
The policy does not cover any liability for product guarantee, product recall, pure financial loss such as loss of goodwill or loss of market. The product insurance policy also does not pay for the costs incurred for reconditioning or repairing or modifying the defective parts.