Page 114 - Liability Insurance IC74

The Insurance Times

The exclusions which are special to products liability
are:
(i) Liability for claims for costs incurred in the repair,

reconditioning, modification or replacement of any
part of any product which is, or alleged to be
defective. The policy is designed to pay for liability
for injury or damage caused by a defective product
and not to pay for damage to the product itself. For
e.g, a manufacturer may have supplied a car with
defective tyres. If the tyres burst causing a collision
which results in injuries to pedestrians, then the policy
covers the liability for the injury is, but not for the
replacement of the tyres or repair of the car.

(ii) Liability for claims for costs arising out of the recall
of any product or part thereof. After being
manufactured and put on the market, sometimes,
the products may be found to be defective. Injury
or damage to third parties because of this may or
may not have been caused. In either case, the
insured for reasons of safety may, have to incur the
expense of recalling all withdrawing the products
from the market, as the policy does not pay the costs
of recall of the product.

(iii) Liability for claims arising out of any product which
with the insured's knowledge is intended for

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