Product’s Liability Insurance

Product’s Liability Insurance

Product's Liability Insurance

The scope of Cover:

This insurance covers legal liability arising out of defective product manufactured and has 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 with the domestic turnover.

This cover is available subject to signed declaration by the insured as regards fulfillment of all statutory requirements.

The risks are classified into seven groups

Rating is based on

I) Annual Turnover II) Indemnity limits as per year.

No revision in limits is allowed during the currency of the policy.

The selected ratio of indemnity any one accident to any one year should be only 1:1,1:2,1:3,1:4 band that no fraction thereof is allowed to be opted.

This liability is restricted to:

  • Any bodily injury/ death on account of accidental injury from the use of such a product to a third party.
  • Any accidental loss or damage to property of a third party.


1/4% per accident. Maximum excess under the policy is restricted to Rs.1,00,000/-


This is in addition to compulsory excess. The discount of premium varies from 2.5% to 15% based on a 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% prem. on the limit of indemnity + loading of prem. on exports turnover.

Unnamed: 10% premium on the limit of indemnity + premium on exports turnover.

The loading is divided into 3 Categories

  • U.S.A./Canada
  • Organisation for economic cooperation and development (OECD )
  • Other countries including non-OECD Countries.

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.


This is considered as the first inception date under claims made policy as well as renewed policy without break in cover.


Officials of the insured, temporary employees, or for that matter any official of the 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 entitled for indemnity under this policy in case of any liability claim under this policy as if he is the insured.


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


The maximum would be per accident limit. This also includes defense cost incurred with the permission of this company.
The policy is subject to compulsory excess/ voluntary excess as earlier specified.

For more information regarding Product’s Liability Insurane