Product Liability Insurance
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Starting At ₹4,000*/year
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Product Liability Insurance
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Get ₹25 Lakh Cover,
Starting At ₹4,000*/year
Product Liability Insurance
Protects against claims of injury or damage from your products
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Product Liability Insurance Made Easy
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Understand
Your Insurance
Before Buying
Product liability insurance provides coverage for various expenses and damages resulting from issues with your product. This includes legal costs, which cover the expenses associated with defending against lawsuits, and medical expenses, which pay for injuries caused to third parties by the product. It ensures that your business is protected from the financial risks that can come with a product-related incident.
See More...Legal Protection Against Claims
In India, consumer protection laws are becoming stricter. If your product causes injury or damage, the law holds you responsible, even if the incident is unintentional. Product Liability Insurance ensures that you’re financially covered in case a customer files a lawsuit or makes a claim.
Business Reputation
In a market where word of mouth matters, a product-related incident can damage your reputation overnight. Product Liability Insurance helps manage risks, allowing you to focus on your business without worrying about the long-term effects of a claim.
Rising Consumer Awareness
Consumers in India are becoming more aware of their rights. If a product malfunctions and causes harm, they’re likely to seek compensation. Product Liability Insurance makes sure you’re prepared to handle such claims professionally, without draining your finances.
Manufacturing and Distribution Risks
Many businesses in India are involved in manufacturing or importing goods. Even if the product isn’t made in-house, you could still be held responsible. This insurance covers the entire supply chain, ensuring you're protected no matter where the product comes from.
Peace of Mind in a Growing Market
In India’s growing economy, where businesses are expanding and consumer expectations are high, Product Liability Insurance gives you the peace of mind to keep running your business safely and confidently.
Product Liability Insurance is essential for businesses that make, sell, or distribute products. If your product could potentially cause harm or damage, this insurance is crucial.
FMCG (Fast-Moving Consumer Goods)
Companies in this sector, like food and beverage manufacturers, need protection in case their products cause health risks or accidents.
Manufacturing
Whether it's machines, tools, or other equipment, manufacturers should have this insurance in case their products malfunction and cause harm.
Retail & E-Commerce
Online sellers and brick-and-mortar retailers need to protect themselves against claims for faulty products, especially in today’s digital shopping world.
Chemicals
Businesses dealing with chemicals or other hazardous materials need product liability coverage in case their products cause injury or environmental damage.
Children’s Toys & Products
Products for children are highly sensitive, and any defect can lead to serious accidents. This insurance is a must in this sector.
Automotive
Car manufacturers and sellers need to ensure they’re covered in case of vehicle defects or safety issues that could harm consumers.
Pharmaceuticals
Medicines and medical products carry significant risks. Pharmaceutical companies need liability insurance in case their products cause harm to health.
Industrial Machinery & Equipment
Companies producing or selling industrial machinery or equipment must have insurance to cover any accidents or injuries caused by product failures.
If you’re in any of these sectors, Product Liability Insurance ensures that your business is financially protected from the risks associated with your products.
Compensation for Third-Party Bodily Injury, Illness, or Death
If your product causes injury, illness, or even death to a third party, your insurance will cover the compensation required. For example, if a customer gets hurt using your product, the policy ensures you aren’t financially responsible for their medical bills or legal claims.
Compensation for Third-Party Property Damage
If your product causes damage to someone else’s property, whether that’s a vehicle, home, or equipment, this insurance covers the costs to repair or replace the property. This ensures you’re not left financially vulnerable if your product causes accidental damage.
Vicarious Liability
This protects your business if you are held liable for the actions of others. For example, if an employee or contractor causes harm using your product, your business could be held responsible. With vicarious liability, your insurance covers you in such situations.
Legal Defence Costs
If your company is sued because of its product, this insurance helps cover the legal costs. From hiring lawyers to handling court fees, it ensures you don’t face a financial burden defending your business in a lawsuit.
Batch Clause
In cases where multiple claims arise from the same product issue (like a defective batch), the Batch Clause allows these claims to count as a single claim under the policy. This could help reduce your overall costs and make it easier to manage claims related to one common problem.
Cross Liability
This clause allows each insured party (for example, your business and another party in the supply chain) to file claims against each other, as though they are covered by separate policies. It ensures that if there are any disputes or damages between parties involved, each is protected.
Vendor’s Liability
This optional add-on is crucial for businesses working with vendors or suppliers. It protects vendors from claims related to defective products that fall under the manufacturer’s policy. If you’re a manufacturer selling products through other vendors, this coverage ensures they’re also protected if your product causes harm.
Financial Loss Coverage
This add-on covers the direct financial losses suffered by third parties if your product fails to perform as expected. For example, if a product malfunction leads to a business losing income, this coverage helps cover the monetary damage caused.
Product Guarantee
This add-on covers the costs of removing, recovering, repairing, or replacing products that do not meet their intended function. If your product fails to work as promised, this add-on ensures that the costs of fixing the issue are covered, protecting your finances and your reputation.
Product Recall Coverage
If your product is found to be harmful or defective, this add-on helps cover the costs of recalling the product. It includes the expenses of retrieving, replacing, or disposing of faulty products and ensuring that affected customers are taken care of.
Extended Coverage for International Sales
If you sell your products internationally, this add-on extends your coverage to include products sold outside of India. It ensures that your business is protected from claims that might arise in foreign markets, where regulations may differ.
Intended Injury
The insurance will not cover any injuries or harm caused by the product if it was intentional. If the injury or damage was a result of deliberate actions, it falls outside the scope of this coverage.
Bodily Injury/Property Damage (PD) of Insured
The policy doesn’t cover bodily injury or property damage that affects the insured party (i.e., you or your business) or your employees. These types of incidents are generally covered under Group Insurance or specific employee policies.
Loss/Damage from Professional Services
If the damage or loss is caused by professional services provided by your business, it won’t be covered under Product Liability Insurance. For these risks, you would need Errors and Omissions (E&O) Insurance, which protects against claims arising from mistakes made while offering professional services or advice.
Product Non-Efficacy
If a product simply doesn’t work as expected or promised, but it does not cause any harm or damage, the insurance will not cover the issue. For example, if a product doesn’t meet its functional promise but doesn’t result in injury or property damage, this won’t be covered under the policy.
Product Warranties
The insurance does not cover issues related to product warranties. If your product fails to meet its warranty terms or the customer is dissatisfied because of a warranty issue, this is considered a contractual matter, not something covered by Product Liability Insurance.
Bodily Injury (BI) of Employees
Any injuries that occur to your employees while using your product are not covered under Product Liability Insurance. These are usually covered under Group Insurance or specific worker’s compensation policies.
Type of Product
The nature of the product you sell plays a big role in the cost. Products that are high-risk, such as food, chemicals, or electrical appliances, usually come with a higher premium because of the increased chance of injury or damage.
Business Size
Larger businesses or companies with a bigger customer base may pay more for coverage. The bigger your operation, the higher the likelihood of claims, which can influence the cost of your premium.
Annual Revenue
Your business’s annual turnover is another factor that affects pricing. If you generate higher revenue, the cost of insurance will likely be higher because your products are reaching more people, increasing the risk of claims.
Claims History
If your business has a history of product-related claims, you may face higher premiums. Insurers consider past claims as an indicator of future risk, so businesses with no claims history often pay less.
Product Distribution
If your products are sold internationally or in multiple markets, the cost can increase due to the broader reach and potential for different legal environments. Different countries have varying product safety regulations, which can affect the level of coverage you need.
Coverage Limits
The higher the coverage limit you choose, the more expensive the policy will be. If you want broader protection, including higher compensation limits, expect to pay a higher premium.
Notify Us
As soon as the incident happens, contact us within 2 days. Share the details of what happened and any key documents, such as the legal notice, FIR, or incident report. We will ensure everything is in place to start the process.
We will Help You with Lawyer Approval
Before hiring a lawyer, we will help you get approval from your insurer. We will guide you through the process and ensure everything aligns with your policy. Do not worry, we are here to assist every step of the way.
We will Guide You on Lawyer Fees
We will help you get the lawyer’s fees approved by the insurer. You can explore different options, and we will ensure the fees match what is allowed in your policy.
We will Handle the Evaluation
We will help submit the necessary documents and ensure the insurer has everything required to evaluate the claim. If anything extra is needed, we will manage it for you.
We will Keep You Updated on the Decision
Once the insurer has reviewed the claim, we will keep you informed about the decision. If there is any delay due to missing information or complexity, we will help gather the necessary updates and keep the process moving forward.
Manufacturing Defect Claim on Electric Kettle
In January 2024, a customer in Mumbai used an electric kettle they had bought from a local retailer. Unfortunately, the kettle malfunctioned and caused an electric shock, resulting in mild burns. The customer filed a claim against the manufacturer for injury and medical costs. The legal defence cost the company ₹3.2 lakhs, while the compensation to the customer amounted to ₹5.5 lakhs. Thanks to their Product Liability Insurance, the manufacturer’s insurer covered the ₹8.7 lakhs, preventing the business from bearing the full financial burden.
Design Defect Claim on Child’s Toy
In July 2023, a toy manufacturer in Delhi faced a claim after a defect in the design of a batch of toys caused them to break easily, presenting a choking hazard. A child was injured when a small part of the toy broke off and was swallowed. The legal fees for the case amounted to ₹4.5 lakhs, and the family was awarded ₹6.8 lakhs in compensation. With Product Liability Insurance, the company’s insurer covered the ₹11.3 lakhs, allowing the business to continue without significant financial strain.
Failure to Warn Claim on Dietary Supplement
In March 2024, a dietary supplement company in Hyderabad was sued after a customer suffered an allergic reaction to one of their products. The packaging did not clearly mention the allergens, leading to the customer being hospitalised. The legal costs to defend the case were ₹2.9 lakhs, and the settlement was ₹4.2 lakhs. The company’s Product Liability Insurance covered the ₹7.1 lakhs, allowing the business to avoid a major financial setback.
Real Review for Real Speed
Vishal Sharma
FounderAutopilot Design
Common Questions Answered
Common Questions Answered
Have questions or need to speak to an expert?
- Bodily injury or illness caused by your product.
- Property damage caused by your product.
- Legal costs and settlements for claims made against your product.
- Defects in manufacturing, design, or failure to warn consumers about risks.
- Intentional injury: If harm is caused deliberately.
- Bodily injury or property damage to your business: This is covered under other insurance.
- Professional services: If you give advice that leads to damage, it’s covered under Professional Indemnity Insurance.
- Non-performance: If a product fails but doesn’t cause harm, it’s not covered.
- Product warranties: Issues with warranties are handled separately.
- Product type: Riskier products like food or electrical items cost more.
- Business size: Larger businesses pay more due to higher risk.
- Sales volume: More products sold mean more risk.
- Claims history: If you’ve had claims before, the cost will be higher.
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