What the Policy covers
This policy covers all sums (inclusive of defense costs) which the insured becomes legally liable to pay as damages as a consequence of accidental death/ bodily injury or disease to any third party and/or accidental damage to property belonging to a third party arising out of any defect in the product manufactured by the insured after the such product has left the insured’s premises. The defect in the product may be due manufacturing defect or may even be due to faulty packaging, delivery specifications, or instructions as to the use of the product. The policy covers liability arising out of products sold – both in the domestic market as well as those exported. 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.
What the Policy does not cover?
The policy does not cover any liability for product recall, product guarantee, or pure financial loss such as loss of goodwill or loss of market. The policy also does not pay for the cost incurred to repair or recondition or modify the defective part of the product.
What you can cover by paying the extra premium?
The policy can be extended to cover liability arising out of judgments or settlements made in countries that operate under the laws of the U.S.A or Canada (which is an exclusion under the policy) by opting for the North American Jurisdiction Clause. The Policy can also be extended to cover Limited Vendors Liability for named or unnamed vendors. Limited vendors liability means liability arising out of the sale and distribution of named insured products by vendors with original warranties and instructions of use of the product specified by the manufacturers
Limit of indemnity
The limit of indemnity should be selected after a proper assessment of liability exposure. The limit under the policy is defined as Any One Accident (AOA) – which defines the maximum amount payable for each accident under the policy and Any One Year (AOY) – It describes the maximum payable amount for any one year under the policy
Claim Procedure.
On the occurrence of any Accident, whether or not the Insured receives any notice of an alleged claim/complaint, shall inform the insurance company.