Product Liability Claims

Product Liability Claims The Old and the New Andrew Robinson ACII FCILA Cunningham Lindsey Liability Services Product Liability Claims “A brand promise can be amassed as a hollow boast at almost any point during a customer’s experience with a company, product or service. Each interaction represents a moment of truth that can enhance or erode the brand, heighten or undermine customer loyalty and affect business results, for better or worse. “ Product Liability Claims Product Liability Claims • What is “damage” for the purpose of policy cover ? • What consequential losses are recoverable under the terms of the policy ? F & H Contractors v Commercial Union (1993) Concise Oxford Dictionary “injury impairing value or usefulness” Bacardi Martini Beverages Ltd v Thomas Hardy Packaging (2002) Bacardi (Finished Product) Thomas Hardy (Bottled and filled the Product) Messer (Sale of CO2) Terra Nitrogen (Manufacture of CO2) Pilkington UK v CTU Insurance (2004) “ generally speaking, damage requires some altered state…this plainly covers a situation where there is a poisoning or contaminating effect upon the property of a third party as a result of the introduction or inter-mixture of the product supplied” Seele Austria v Tokyo Marine (2007) “adverse physical effect on the physical state of the works, as a result of the defect” Is there Damage ? Product Liability • 1. Do you understand the nature of the Policyholder’s business ? • 2. Do you understand the exposure the Policyholder’s business will encounter ? • 3.Can agreement be reached up front between Insurer and Policyholder, relative to the exposure and what constitutes damage ? A S Screenprint v British Reserve Damage Downtime to eradicate production problems Downtime whilst soucing alternative/replacement product The Multi-tool Product The Bar Stool Recovery from Abroad • The jurisdiction issue ! • Which law ? • Enforcement of Judgements ! Product Recalls Product Recalls 200 180 160 140 120 100 80 60 40 20 0 2004 2005 2006 2007 The Military Recall The Motorcycle Recall The General Product Safety Regulations 2005 The General Product Safety Regulations 2005 • • • • 1. Suspension Notices 2.Requirement to warn 3 Withdrawal notices 4 Recall notices Summary • The “Damage” debate will continue. • Claim numbers will likely increase. • Overseas recoveries will not get any easier. • There will likely be an increasing need for Product Recall cover.