What is product liability insurance and who needs it?
In Israel, the “Defective Products Liability Law” is formulated in a manner that holds the manufacturer and the vendor fully liable for the products they manufacture, import or market. In other words, in the event that a consumer was harmed by a product in any manner, whether physically or mentally, the vendor/manufacturer/importer will be obligated to compensate the consumer.
Product liability insurance protects the policyholder from claims for damage caused by his products after they are no longer in his possession. The importance of this insurance policy derives from the fact that the manufacturer/importer is under a risk of considerable financial liability towards a person who was harmed in any manner by his product.
When does product liability insurance apply?
Product liability insurance applies to two kinds of events or circumstances, or, in other words, the policy provides indemnification for financial liability to the insured in the following circumstances:
Physical injury – a condition in which a person suffered physical injury.
Whether it is death, physical injury, or mental illness caused by any third party.
Property – a condition in which damage or loss of tangible property is caused to a third party,
including “consequential loss” deriving thereof.
Product liability insurance indemnifies policyholders for financial liability in a manner that not only third party claims are covered but also the legal expenses of the insured required for the purpose of defending himself from the claim are covered as well. Claims concerning bodily injury or damage to property following use of products are common in Israel and worldwide.
Business owner-
Do not be exposed to third party claims, legal expenses and considerable financial liability.
