You have worked hard to create that world class product. However, it is important that you cover all financial risks arising out of third party loss due to your product. A product liability policy covers all sums (including the legal costs) that you would be legally liable to pay as damages as a result of

  • Accidental death / bodily injury or disease to a third party
  • Accidental damage to the property belonging to the third party

Due to defect in the product or faulty packaging or wrong instruction regarding use of product. In a Product Liability Policy, the sum insured is referred to as Limit of Indemnity. While selecting the sum insured for your policy, the limit is chosen based on AOA (any one accident) and AOY (any one year). The AOA limit is the maximum amount payable per accident and should be fixed depending on the product, the customer base using it and the potential third party damage it can cause if something has to go wrong with its quality, packaging etc. Typically, the ratio of AOA limit to AOY limit is selected from the following options :

  • 1:1
  • 1:2
  • 1:3
  • 1:4