Product Liability Insurance indemnifies the insured against all sums which the insured becomes legally obligated to pay in respect of Bodily Injury or Property Damage to a Third Party, and accidental loss of or damage to third party's property, arising out of the use, misuse, consumption, or handling of insured products or goods.
The Risk:
Whether the client is a manufacturer, a vendor, a supplier, or an exporter, he is exposed to the risk of product liability claims. In fact, any link in the chain of commerce is exposed to this risk.
A product liability claim is usually based on one or more of the following causes:
- design defect
- manufacturing defect
- a failure to warn
The claim may succeed even when products were used incorrectly by the consumer, as long as the incorrect use was foreseeable by the manufacturer (or other party in the "supply chain").
In general, product liability claims are based not on negligence, but rather on strict liability. Under the doctrine of strict liability, a manufacturer is held liable regardless of whether it acted negligently. It allows recovery for an injured customer who might be in a difficult position to prove what a manufacturer did or did not do in the design or manufacturing process. It is presumed that a manufacturer, with “deep pockets”, may be better situated to absorb the cost of liability and would consider such expense in setting the price for its products.
Some legal commentators consider claims of failure to warn to be based on negligence.
A basic negligence claim includes proof of:
- a duty owed,
- a breach of that duty,
- an injury, and
- that the breach caused the plaintiff's injury.
During the 1980's, the Israeli legislature enacted a list of laws which were consumer oriented, namely laws which were meant to protect the consumer. Among these laws are the Consumer Protection Law - 1981, Liability for Defective Products Law -1980, the Insurance Contract Law -1981, and others.
The Solution:
Howden Israel provides Product Liability policies for all types of product exposure, including Multinational Programs for Exporters, Manufacturers, Importers and Vendors throughout the World. We offer a tailor-made personal service, backed up by one of the most experienced claims teams in the market. | 
