A product leaves your control the moment it is sold — but your responsibility for it does not. If it injures someone or damages property because of a defect, the claim can follow you across the country, or across the world. Product liability insurance is what stands behind it.
What product liability insurance is
Product liability insurance covers yourlegal liability for third-party bodily injury or property damage caused by a defectin a product you have manufactured, sold, supplied or distributed. It pays the compensation and the cost of defending the claim.
Can your product trigger a lawsuit?
Yes — and increasingly so. Under India’s Consumer Protection Act, 2019, product-liability principles hold manufacturers, sellers and service providers accountable for harm caused by defective products. A single faulty batch can generate multiple claims.
The three kinds of defect
Design defect
The product is unsafe by design, even when made correctly.
Manufacturing defect
A flaw introduced in production makes a unit unsafe.
Failure to warn
Inadequate instructions, labelling or safety warnings.
What it covers
- third-party bodily injury caused by a defective product;
- third-party property damage caused by the product;
- legal defence costs; and
- liability arising from products already sold and in the market.
Who needs it
Manufacturers, importers, exporters, distributors and retailers. It is especially critical forexporters— markets such as the US and EU are highly litigious, awards are large, and buyers routinely make product liability cover a condition of supply.
Key extensions
| Product recall | The cost of recalling a defective product from the market. |
| Worldwide jurisdiction | Cover extended to claims brought in overseas courts, including US/Canada. |
| Vendors’ liability | Extending cover to your distributors and retailers. |
How limits are set
Cover carries AOA and AOY limits, sized to your product, its risk profile, your turnover and the markets you sell into — higher limits are prudent where you export to litigious jurisdictions.
What it does not cover
Typical Exclusions
- •product recall, unless specifically added;
- •the cost of repairing or replacing the defective product itself (a warranty matter);
- •pure financial loss where the product simply underperforms without causing injury or damage;
- •deliberate breach of safety regulations.
How Aurevian helps
Aurevian helps youmatch limits and jurisdiction to your markets, add recall cover where the exposure warrants it, align cover with buyer contracts, and manage claims— so a defect does not turn into a business-ending liability, at home or abroad.
“Your responsibility for a product does not end at the point of sale — and neither should your cover.”
