��˾����ҹ����

What is product liability insurance?

Product liability insurance provides an indemnity to a business in respect of legal liability to the end-users of the products which it either manufactures or sells. Broadly speaking, this liability arises under the tort of negligence (see Donoghue v Stevenson), the strict liability regime imposed by the Consumer Protection Act 1987 (CPA 1987) or under contract (either expressly or pursuant to a term implied by the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982 or the Consumer Rights Act 2015). The essence of the cover provided is for liability arising out of personal injury or physical damage to property. Product liability cover does not usually extend to cover damage to the defective product itself or to pure economic loss.

Product liability insurance is not compulsory and there is not a single ‘standard form’ product liability policy, but a number of off-the-shelf products are available, often combined with public liability and/or general liability insurance. For larger insureds with