Archive for the ‘product liability insurance’ Category

Product liability – exports to US and Canada

Saturday, April 16th, 2011

Nowadays there are many thousands of high street retailers, who also operate a retail website. This does not mean they are neglecting their main business, just looking for an extra way of earning income.

If they have a standard shop insurance policy, then it is worth making the insurers, or the broker, aware of this additional activity. The standard, package type, policy will no doubt have a specific exclusion. You will find that most business insurance policies, where there is product liability cover have the following type of exclusion:-

Product Liability

Cover is excluded in respect of liability for products knowingly supplied or exported to the United States of America and/or Canada.

If a shop is selling products and they know that there are customers in North America, which in this day and age is very easy, then they need to make sure they have the right cover. It is not enough to say, “it’ll never happen to me” “I’ll never get a claim” or anything similar. Claims do occur, with increasing frequency, and you should always seek advice about the best type of policy.

It may well be that if you declare that only a small proportion of your turnover, usually less than 5%, is in respect of exports, and, importantly, you are not manufacturing, then your policy will give you cover. But, the policy will state that any actions brought against you must be in a UK court of law (as this is cheaper for insurers). Therefore, if you do have the relevant cover and you receive notification of a potential claim, then you must do nothing except speak to your business insurance broker in the first instance. Do not react to any notifications you receive without seeking some sort of advice from your broker.

One poitn to mention is where the exclusions say “knowingly”. If you sell a product to Mr A , who sells to Miss B who then sells to a customer in America, you cannot control that supply chain and cover shoudl apply. But, you need to watch out as some policies will simple exclude ALL products liability in respect of US/Canada exports, whether you are aware or not.

Posted in business insurance, product liability insurance, products liability insurance, shop insurance | Comments Off

Commercial insurance – minimum cover requirements

Wednesday, March 9th, 2011

We had an enquiry yesterday from a customer looking to get an alternative commercial insurance quote. We talked through what they currently had and there were some significant gaps in their cover. The main issue was that they had gone on to an online provider, where you basically pick and choose the cover that you think you need.

So, they had picked stock, contents and employers liability. The reason they were looking around was that they had a potential product liability insurance claim in the offing and, as you can probably guess, there was no cover on their current policy.

The providers of the wesbite, who were a broker with the cover then placed through the Lloyds of London commercial insurance market, basically said “tough”. They told the customer that the option was there for them to pick products liability (and the public liability which they also did not have) and as they had not chosen it, there was nothing they could, or would do.

We have provided the customer with a quote, including the missing liability covers, goods in transit and computer breakdown, all for less than they were paying. Whilst this is some good news, they now have to try and fend off a claim at their own expense.

The question they asked me, was what is the minimum cover requirement? We explained that basically the minimum cover is the minimum you are legally required to have ie employers liability and maybe some engineering inspection cover on items of mechanical plant (ie fork lift/pallet trucks).

So, the website was not technically doing anything wrong, but the issue was that they did not make it clear to the customer that the cost of adding in the missing liability covers would far outweigh the potential claims costs.

Now, the customers turnover was jsut shy of £1m, so they can take their case to the Ombudsman, but this wil take a long time and I have a feeling that the Ombudsman will rely on precedent that a business person should be able to have made a business decision about their insurance requirements.

The big question is therefore, what should you do in future? Speak to a business insurance broker, when we say speak, we mean speak, call them and discuss what you need and more importantly what they think you need.

Posted in commercial insurance, product liability insurance | Comments Off

Products liability insurance – who needs this cover?

Saturday, August 21st, 2010

We often get asked, when people are looking for a business insurance quote, whether they need products liability insurance.

The answer to the question, which does not help, is yes, probably. There is no legal requirement, under UK law, for a business or individual to have products liability.

We first of all need to understand what this cover is. Simply put, if you manufacture or supply (with the manufacture being undertaken by someone else) a product, which causes injury, illness, disease or damage to another person(s) or property, you can be held legally liable. Now, as you can be held legally liable you would think it follows that you should have the cover, but this is not the case.

So, now we understand that 80% of UK businesses (who supply or manufacture products) need this cover, what happens if you do not have it? If I go to a supermarket and buy a tin of beans, in UK law I have a financial relationship with the supermarket. Therefore, if the product poisons me, I will claim against them. The law is not concerned with who made the product, I claim against the party I bought it from.

The supermarkets insurers would then pay out to me, with their insurers deciding whether to subrogate (or claim) against the business insurance insurers of the ultimate product manufacturers. This is where it gets interesting, every link in the chain from product manufacture to sale, which can be three, four, five or more companies, needs to have insurance cover.

The potential for a claim is low, but you really should have the cover in place. You don’t need to have the cover, no-one is going to quote UK law to you to prove you need the cover. But, if you want to get adequate protection for your business you really should give us a call to get your own product liability insurance quote.

Posted in business insurance, business insurance quote, product liability insurance, products liability insurance | Comments Off

Wholesalers insurance – who do you import from?

Monday, February 8th, 2010

When looking around for a wholesalers insurance quote, you really need to have certain information to hand to make this process as smooth as possible. Financial information about the company, such as estimated turnover, wages and gross profit are a minimum.

When you look at the different elements of cover provided by the policy, there are certain questions that you will be asked. One of these relates to the actual products that you are wholesaling. Here in the UK, it does not matter where you bought the products from. If I purchase from you, this is the financial relationship that is governed by English or Scottish Law.

If there is an injury or damage caused, then I am entitled to make a claim under your product liability insurance. Your insurers, if a valid claim, can choose to pursue settlement against the insurers of the original manufacturers, but your policy will pay out first.

So, insurers want to know where you import from. If you buy within the EU this is good, as a potential claim is easier to pursue than if you import from the Far East. This is not saying that there is a difference in the quality, simply that the legal costs (for your insurers) in pursuing a claim are cheaper within the UK/EU than outwith.

So, you need to declare to your commercial insurer exactly where you are sourcing the products from. Some policy wordings need to have separate clauses added noting if imports are received from outwith EU. Certain, smaller, underwriters simply do not have the capabilities to underwrite these types of products and you are more suited to arranging a policy with a different capacity provider.

Posted in product liability insurance, products liability insurance, wholesalers insurance | No Comments »