Page 21 - Liability Insurance IC74

Guide for Liability Insurance

(b) List out the exclusions which are special to
products liability policy.

Ans. 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

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