Page 22 - Liability Insurance IC74

The Insurance Times

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
incorporation into the structure, machinery or control
of any aircraft. For e.g, the insured may be supplying
products like aircraft engine or tyres for aircraft.

A defective part may result in damage to the aircraft
or even a crash. Such catastrophic risk is covered
by specialist aviation insurance market. The
products liability policy does not cover liability for
such claims.

(iv) Liability arising out of any product guarantee.
Manufacturers often guarantee their product for a
specified period and replace or repair defective parts
during the guarantee period.

The costs of repair, replacement etc are actually
business risks and cannot be covered under an
insurance policy, as they would require underwriting
a manufacturer's technical skills and know-how.

(v) Liability arising out of claims for failure of the goods
or products to fulfill the purpose for which they were

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