Products Liability

The policy covers all sums (inclusive of defence costs) which the insured becomes legally liable to pay as damages as a consequence of:

  1. Accidental death/ bodily injury or disease to any third party
  2. Accidental damage to property belonging to a third party

arising out of any defect in the product manufactured by the insured and specifically mentioned in the policy after such product has left the insured’s premises.

The policy offers the benefit of Retroactive period on continuous renewal of policy whereby claims reported in subsequent renewal but pertaining to earlier periods after first inception of policy, also become payable.

The defect in the product may be a manufacturing defect or may even be due to faulty packaging, delivery specifications or instructions as to use of the product.

The policy covers the sales turnover of the company – both domestic and/or exports. The policy is on a claims made basis i.e. the claims must arise and be made in writing to the insurance company during the policy period.

The policy does not cover any liability for product recall, product guarantee, pure financial loss such as loss of goodwill or loss of market. The policy also does not pay for the cost incurred for repairing or reconditioning or modifying the defective part of the product.


The policy can be taken out by the manufacturer of any product whether it be the final product or part of the final product

How to claim

Liability will be proved only when the following conditions are satisfied:

  • Existence of duty of care
  • Breach of this duty
  • Injury suffered by a person or property damaged as a result of that breach:
  1. In case of any event likely to give rise to a liability claim as described above, the insurance company should be informed immediately by phone, email, fax or in writing.
  2. In case any legal notice or summons is received, it should be sent to the insurance company who will have the option of arranging the defense in the case.
  3. The event giving rise to the claim should have occurred during the period of insurance or retroactive period and the claim first made in writing against the insured during the policy period.
  4. The maximum amount payable including defense costs will be the “Any One Accident Limit” selected. The “Any One Year” Limit” will get reduced by the amount of claim or indemnity paid for any one accident. Any number of such claims made during the policy period will be covered subject to the total indemnity not exceeding the “Any One Year Limit”.

DO NOT make any admission, offer or promise or payment without written consent of Insurers.

Note: Policy details given are indicative, not exhaustive. Please contact your nearest FICO office for further details.