Page 23 - Liability Insurance IC74

Guide for Liability Insurance

intended. This exclusion is referred to as 'efficacy
risk'. For e.g, a burglary alarm may fail to function
at the time when burglar breaks into premises,
pesticides may fail to kill the pests, machineries
supplied to a factory may start malfunctioning
resulting in loss of production etc.

These examples show that these are commercial
or trade risks and are excluded under the policy.

(vi) Liabilities arising out of the products which have
left the custody or control of the insured prior to
retroactive date specified in the Schedule. Period
of Insurance means the period commencing from
the retroactive date and terminating on the expiry
date.

Also, the Indemnity only applies to claims arising
out of accidents, during the period of insurance and
first made against the Insured during the policy
period. However, if accidents during the period of
insurance are caused by products which have left
the custody or control of the insured prior to the
retroactive date, then there is no liability under the
policy.

(vii)Liability for damage to property belonging to the

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