Product's Liability Insurance

Introduction

Scope of cover: This insurance covers legal liability arising out of defective product manufactured and have left the premises as against public liability insurance which covers risk within the premises. Maximum limit of indemnity under the policy is restricted to Rs. 3.5 crores any one year and applies to liability arising within India.

Export to U.S.A/Canada and other countries can be covered together with domestic turnover. This cover is available subject to signed declaration by the insured as regards fulfilment of all statutory requirements.

The risks are classified in seven groups.

Rating is based on (i) annual turnover (ii) indemnity limits per year.

No revision in limits is allowed during currency of the policy. Selected ratio of indemnity any one accident to any one year should be only 1:1, 1:2, 1:3, 1:4 and that no fraction thereof is allowed to be opted.

This liability is restricted to :

i. Any bodify injury/death on account of accidental injury from the use of such product to third party.
ii. Any accidental loss or damage to property of a thrid party.

• Compulsory excess:
  1/4% per accident. Maximum excess under the policy is restricted to Rs. 100,000


• Voluntary excess:
  This is in addition to complusory excess. The discount of premium varies from 2.5% to 15% based on percentage of limits selected under the policy from 1% to 10% of any one accident.


• Extensions of Exports Vendor's Liability together with Domestic Cover:
  Named: 5% Premium on limit of idemnity + loading or premium on exports turnover.

Unnamed: 10% Premium on limit of idemnity + premium on exports turnover. The loading is divided in 3 categories.

• U.S.A/Canada.
• Organisations for Economic Co-operation and Development.
• Other than above.

This Policy is issued with pre-condition that sum Insured and payment of claims will be in Indian rupees. In case insured desires settlement in foreign currency Reserve Bank permission will have to be taken in view of exchange control regulations.

d. Retroactive date:

This is considered as the first incepted date under claims made policy as well as renewed policy without break in cover.
Policy period is midnight to midnight i.e. retroactive date to expiry.

Clauses: Notification Extension clause:

Any notification of acceptance and / or claim under the policy will be made as if the same is made against insured. Extension of time will be as per limits laid under Indian Limitation Act.

Claim reporting clause:

As per this clause the limit laid down there under is 90 days expiry/cancellation of the policy for an event occurred during the currency of the policy. This extension clause however applies to policy that is not renewed consecutively.

Indemnity to others:

Officials of the insured, temporary employees, or for that matter any official of Insured who is responsible for liability arising out of the business operation or any other incidental operation connected with the business operation of the insured would be entitled for indemnity under this policy in case of any liability claim under this policy as if he is the insured.

Cross Liabilities:

Each person/party will be separately entitled for indemnity in respect of any claim made against them. This would however be restricted to limits of indemnity specified under the policy.

Indemnity Limits:

Maximum would be per accident limit. This also includes defence cost incurred with the permission of this company.

Claims series clause:

This applies to each accident. In case of series of claims arising out of the same event (faulty design, use, labelling, supply, service, product claims made and subsequent reporting shall be indemnified upto indemnity limits under A.O.A. limits. This is however subject to limitation period of three years. There would be therefore, no liability for same occurrence reported after three years.

The policy is subject to complusory excess/voluntary excess as earlier specified.

In case of continuous inhalation/ingestion of obnoxious material injury date is considered as first consultation date of the doctor or first evidence of the same to the claimant and duly reported thereof.

Exclusions: Company will not be liable for any claims arising out of following:

• Cost of repairs, reinstatement, modification of defective product, including cost to recall whole or part of the product.
• Cost arising out of any product intended for incorporation into structure, machinery, control or any aircraft.
• Non compliance of statutory orders.
• Loss of goodwill/market or due to any fine/penalty.
• War and allied perils, radioactive contamination, unclear fuel and other such perils.
• Damage to any property belonging to or held trust by theinsured.
• Any loss or damage prior retroactive date except in case of continuous inhalation of material where injury cannot be established in which case first consulation of medical practitioner or first noticed date will be taken as occurrence date i.e. damage first evident cause unknown as date of occurrence.
• Deliberate disregard of technical/administrative management.
• Any contractual liability and under contract or employment.
• Failure of the product for the purpose it was intended.
• Product guarantee.

Conditions:

• Written notice immediately on occurrence of the event. This should be followed by relevent information of the event together with submission of any writ summons received by the insured.
• Insured shall not make any admission offer without prior consent of this company.
• Defence Proceedings: This company has the right and is not obligated to conduct the defence. The expenses for which will be borne by the Co. subject to limits of indemnity under the policy after after taking into account the amounts the amounts Claimsd thereunder.
• Insured shall provide all the assistance in conducting the proceedings of the claim.
• Any changes/alteration material to the risk shall be intimated to this company.
• The company shall relinquish all conduct of the claim on payment of any claim or series of claims out of the same event and that no further liability will be admisible thereof.
• Policy and schedule will be read together. All terms & conditions shall be interpreted in accordance with provisions of Indian law.
• Proper mainteance of record of turnover by the insured and company has the right to inspect the same.
• Contribution condition.
• Cancellation clause 30 days notice with minimum retention being 25% of the annual premium. There will not by any refund of premium if claim is notified under the Policy.
• In the event of claim there will not be any reinstatement of limit, and that existing limits shall stand reduced to the extend of liability so admitted.
• In case of disClaimsr of liability limitation period is 12 months to file a suit in court of law from the date of disClaimsr.
• All benefits under this policy shall be forfeited if claim is fraudulent.
• Cause of action would be within India except export goods covered under the policy.
• Policy disputes clause: All interpretations are subject to Indian law subject to jurisdiction within India.

Risk Assessment:

• Analysis of production schedule/activities; use thereof ; sale of the product manufacture of the product.
• Safety control programme/implementation thereof.
• Hazard analysis.
• Design/material used.
• Manufacturing process
• Quality control.
• Packing/Labelling.
• Sales/distribution network.
• Details of customer complaints.
• Previous history.
• Other considerations e.g. labour relations.