Product Liability Insurance
Cover For Claims After Your Products Leave
Once a product leaves your factory or shop, you can still be held liable for years if it injures someone or damages their property. Under the Consumer Protection Act, 2019, manufacturers, sellers and service providers can all face product liability actions. Product liability insurance pays the compensation and defence costs. MILES helps manufacturers, importers, brand owners, traders and exporters choose the right territory, limit and trigger, and compare terms from several insurers before you commit.
What Product Liability Insurance Covers
Injury From Products
Compensation for death, illness or bodily injury caused by a defect in goods you made, sold or supplied.
Third-Party Property Damage
Damage caused to someone else's property by your product, such as a fire started by a faulty appliance.
Defence Costs
Legal fees and expert costs to defend covered claims before consumer commissions, civil courts or overseas courts.
Worldwide Or Export Territory
Cover for goods exported abroad, with USA and Canada exposure available from some insurers at separate rates.
Vendor Extension
Extends protection to distributors and retailers who sell your products, often required by large buyers and platforms.
Retroactive Protection
On claims-made policies, covers goods sold before the policy began, back to the agreed retroactive date.
What is product liability insurance?
Product liability insurance covers a business’s legal liability for death, bodily injury or property damage caused by a product it manufactured, supplied, sold or distributed. It pays the compensation awarded and the cost of defending the claim. It protects manufacturers, importers, brand owners, wholesalers and retailers alike.
It is part of our liability insurance range and can be bought on its own or as a section of a commercial general liability policy.
Why product liability matters in India
The Consumer Protection Act, 2019 introduced a dedicated chapter on product liability. A consumer can bring an action against a product manufacturer for a manufacturing defect, design defect, deviation from specifications, breach of express warranty or inadequate instructions and warnings. Product sellers and service providers can also be held liable in defined situations. Claims can be filed before district, state or national consumer commissions, depending on value. For exporters, claims can arise in the courts of the buyer’s country, where awards and legal costs may be far higher.
What the policy covers
- Compensation for third-party death, bodily injury or illness caused by the product.
- Compensation for damage to third-party property caused by the product.
- Defence costs and expenses incurred with the insurer’s consent.
- Vendor’s liability, where the policy is extended to named distributors or retailers.
- Cover for the territory and jurisdiction you select, from India only to worldwide.
What is not covered
- The cost of replacing, repairing or refunding the defective product itself.
- Product recall and withdrawal expenses, which need a separate recall policy.
- Financial loss where the product simply failed to perform, without injury or damage, unless an extension applies.
- Known defects, deliberate non-compliance and products not declared to the insurer.
- Liability under guarantees or warranties beyond what the law would impose.
- Punitive or exemplary damages, where excluded by the wording.
Claims-made or occurrence trigger
Product liability in India is written on either basis. Under an occurrence trigger, the policy in force when the injury or damage happened responds. Under a claims-made trigger, the policy in force when the claim is made responds, as long as the incident happened after the retroactive date. Claims-made policies are common for exporters and US exposures. Keep cover continuous and protect the retroactive date when you change insurers.
How the premium is decided
Insurers look at the type of product and its hazard, annual turnover split by territory, the share of exports to the USA and Canada, quality systems and certifications, labelling and instructions, contract terms with buyers, and claims history. A children’s product, medical device, food item or automotive component will be rated very differently from packaging material. The limit you need is often set by the buyer’s vendor agreement.
Who needs product liability cover?
- Manufacturers of food, pharmaceuticals, cosmetics, electricals, toys, auto parts and machinery.
- Importers and brand owners putting their name on goods made by others.
- Exporters whose overseas buyers insist on a certificate of insurance.
- Traders and e-commerce sellers asked by platforms to show cover.
How MILES helps
- Understand the supply chain: we look at how your products are made, labelled and sold, and who you need to protect.
- Compare insurers: we approach several insurers and explain differences in territory, trigger, deductible and exclusions.
- Match buyer demands: we check vendor agreements and arrange additional insured or vendor endorsements where the insurer allows.
- Coordinate other covers: we align product liability with your transit cover under a marine open cover and your premises liability.
- Support claims: we help you respond to legal notices quickly and work with the insurer on defence.
What we need for a quote
- Full product list with descriptions and end uses.
- Turnover for the last and current year, split by India, USA and Canada, and rest of world.
- Quality certifications, testing processes and sample labels or manuals.
- Required limit, territory and any vendor agreement clauses.
- Existing policy details and claims history.
Cover, exclusions and premiums depend on the insurer’s policy wording and underwriting. MILES Insurance Brokers Pvt. Ltd. is an IRDAI-licensed direct broker (Life & General, Reg. No. 954); the insurance is issued by the insurer. Insurance is the subject matter of solicitation.