Businesses advised, “Know your insurance”

“Just like apples, oranges and bananas, these three insurance covers are quite different under a General Liability insurance policy that you may already have or are thinking of purchasing,” said James Gillard, Managing Director of Insurance Made Easy (IME). He goes on to outline the key characteristics of each.

PRODUCT LIABILITY INSURANCE

Your product  (itself causes harm)  means  any physical property after it has left the Insured’s custody or control, which has been designed, specified, formulated, manufactured, constructed, installed, sold, supplied, distributed, treated, serviced, altered or repaired by the Insured or on the Insured’s behalf .

What event would trigger a likely insurance claim? 

The product would need to cause or alleged to have caused personal injury or property damage, said Gillard. “Clients therefore purchase this type of insurance as a way of reducing their liability in the event their product causes harm. The outcomes of such events can be costly to any business. If such an occurrence takes place and there are multiple units of the product already sold that could potentially cause harm, it may be necessary for the insured to initiate a recall, so potential further injury or damage to property cannot occur.”

The majority of public and products liability insurances do not automatically include product recall and it may be worthwhile considering a Stand-Alone Product Recall Insurance program.

What are the types of product recall expenses that can be covered under a Stand-Alone Product Recall Policy? 

• The costs associated with recalling the product from the market
• The cost to replace the product in the market 
• Any extortion costs made against the product 
• Expenses around rehabilitating your business due to the product recall
• The costs associated with the employment of specialised consultants such as public relations experts 
• Business interruption cover to protect your loss of profits during the recall which has impacted the business’ productivity 
• Some insurers also provide In-house claims personnel available 24-hours-a-day, 7-days-a-week, dedicated to crisis management claims

PUBLIC LIABILITY INSURANCE

“Public Liability Insurance protects your business for any negligence which results in either physical injury or property damage. With society becoming more litigious it is important that you properly protect your business activities whether they are conducted on or off site. A claim could result from one of your clients tripping over your equipment whilst at their work premises, suffering a loss of income due to time off work or significant permanent injury.  A physical personal injury could mean bodily injury, sickness, disease, disability, shock, loss of amenities, discomfort, disfigurement, malformation, fright, mental anguish, mental injury, or death of or to any person. It might be the effects of false arrest, false imprisonment, wrongful detention or malicious prosecution or the effects of wrongful entry, wrongful eviction. It may also be how the aggrieved party has been impacted by libel, slander, humiliation or violation of personal rights and the effects of assault and battery committed for the purpose of protecting persons and/or property. As for property damage, this could mean loss or destruction of, or physical damage to tangible property, including any resulting loss of use of that property.”