Product Liability Insurance

Nicholson, C. E., Heyes, P. F. and Wilson, C. 1993 Common Lessons to be Learned from the Investigations of Failures in a Broad Range of Industries. In Rossmanith, H. P. (ed.). Structural Eailure, Product Liability and Technical Insurance. Elsevier. 

There is a legal requirement upon most employers to have in force employer s liability insurance covering injury to their employees. Public liability insurance, while not compulsory, is strongly recommended, both in terms of third-party liability (arising from the effects of corporate activities) and product liability (arising from the effects of corporate products. 

It should be noted that very few standard product liability policies provide cover for liability for the costs of repairing or replacing defective products or those, which fail to perform as intended, nor for the costs of any necessary product recall. The insurer s liability in any one period of insurance for injury or damage caused by products during that period shall not exceed the selected limit of indemnity. 

Individuals and companies that buy insurance products could be stimulated to address climate change-seeking mechanism to facilitate mitigation of GHG emissions and adaptation to the inevitable impacts of climate change [16]. In addition, the insurance companies themselves are motivated to take significant actions to mitigate GHG emissions and increase adaptive capacity to reduce overall uncertainty and other barriers to insurability and are also motivated to limit the insurers potential exposure to catastrophic risks in excess of their capacity to avoid the potential for property and liability claims in excess. 

In March 2004, Bayer settled with its insurance carriers, eliminating the insurers rights of litigation and settlement and setting the limits of liability at 1.2 billion. In July 2004, the company settled 2771 cases for 1.06 billion. In September 2004, Bayer settled another 2861 product liability cases for 1.09 billion. There are still 7577 such suits pending. ... 

Priest (1988,190-94), however, argues that the explosion in product liability litigation has not measurably deterred accidental or job-related death rates. But he recognizes that simple time-series bivariate analysis is rather crude evidence, because there is no coun-terfactual of how many accidents would have occurred if a noliability, first-party-insurance regime had existed. 

Empirical work about the liability system utilizes several famous data sets. The Insurance Service Office, a research arm of the insurance industry, randomly sampled product liability claims in 1976 and 1977, but the universe represents only claims. Viscusi (1986,1988,1989b) has extensively used these data. The Rand Corporation has assembled the results of all civil jury trials held in federal and superior state courts in Cook County, Illinois, and San Francisco, California, from 1959 through 1984 and issued a series of studies (Peterson 1986). 

Epstein, Richard A. 1985. Products Liability as an Insurance Market. Journal of Legal Studies 14 645-69. 

Most countries operate with statutory state compensation schemes, which companies may need to supplement with other private-based insurances both usually include economic-based incentive systems to improve chemical safety40 [233]. Environmental and product liability generally establish when civil action can be successfully taken against a company or an individual [234]. If a company is in compliance with the law, it is possible that civil action becomes directed towards the regulator in the form of judicial review for... 

It is not uncommon for university license agreements to call for the licensee to provide adequate product liability insurance, naming the university as an insured party. (For an interesting consideration of the issues of product liability for injuries caused by recombinant DNA bacteria, see "Strict Product Liability for Injuries Caused By Recombinant DNA Bacteria", 22 Santa Clara Law Review, 117.)... 

The liability insurance industry is a poor source of information on the drug industry s product liability experiences because companies now largely self-insure for all but the highest liability losses. The best source of information on the costs and implications of product liability law in this industry are drug companies themselves. The Office of Technology Assessment (OTA) found no published data summarizing industry experience.1... 

Despite the lack of data, it is possible to sketch a rough picture of product liability trends in the research-based pharmaceutical industry from a variety of sources that are incomplete by themselves, including trends in law and insurance markets, a few in-depth studies of product liability litigation in particular jurisdictions, and anecdotal accounts of products particularly vulnerable to liability claims ... 

Over the past 15 years, product liability claims and litigation against pharmaceutical manufacturers appear to have increased as measured by numbers of cases and changes in liability insurance. The legal circumstances under which courts hold pharmaceutical manufacturers responsible for injuries to consumers also broadened in recent years. 

Manufacturers traditionally protect themselves against the financial risk of product liability damage awards by buying insurance. Changes in pharmaceutical manufacturers liability premiums, claims, and uninsured expenses provide a measure of the financial impact of product liability on a firm s cost of doing business and... 

For the manufacturer, the total costs attributable to product liability include deductibles, any other losses not covered by insurance, any legal or administrative costs borne by the firm, and insurance policy premiums. 

Systematic attempts to determine product liability costs borne by the pharmaceutical industry, and the impact of product liability on fins R D decisions, innovation, and drug safety would require data from several sources, much of which is currently unavailable. Firms do not routinely report to the public on liability claims made on their products or settlements made by the firm or their insurers. Insurance companies collect data on claims made under their policies but do not report on claims associated with particular companies or products. For the minority of claims proceeding to litigation, court records exist but are not centralized across different State and local jurisdictions. 

OTA found only one attempt to bring together industrywide data to determine if product liability inhibits pharmaceutical innovation. In a 1991 study, Viscusi and Moore compiled data for pharmaceuticals and several other manufacturing industries for the lfost half of the 1980s on both product liability insurance experience and innovation (501). They concluded that during the period examined pharmaceuticals were both relatively innovative and subject to a volatile liability burden-that do not lend support to the hypothesis that product liability inhibits innovation. However, their study does not control for other factors that might have affected innovation.18 In addition, their examination of industrywide data may obscure differences in access to various types of pharmaceuticals. 

The statistics on product liability are likely not to bean accurate reflection of product liability activity in the pharmaceutical industry because the authors depend on insurance data and much of the transition tcself-insurance for drug manufacturers occurred... 

Product liability factors are becoming increasingly larger cost items in a corporation s budget process. Insurance costs are increasing civil penalty awards are increasing. 

Insurance Insurance against product liability has dramatically increased as a cost factor for manufacturers in recent years and appropriate budgeting and planning will be needed and a review of policy coverage will have to be conducted periodically. 

Of considerable interest to manufacturers will be the Product Liability Risk Retention Act of 1981 which passed the U.S. House of Representatives (as H.R. 21201) on July 28, 1981 and the U.S. Senate, in identical form (as S.1096) on September 11,1981. The legislation, perhaps inspired by cases such as Sindell, discussed previously, was introduced by Senator Robert W. Kasten (R.-Wis.). Among other things, it removes numerous state insurance regulation barriers to the formation of self-insurance groups, and enables product sellers to get together and buy commercial liability policies on a group basis. 

In general terms, product liability refers to the liability of a seller of a product which, because of a defect, causes damage to its purchaser, user, or sometimes a bystander. The origins of product liability law can be traced to cases brought before British courts shortly after the onset of the Industrial Revolution in the first half of the nineteenth century. Since then, an ever-increasing volume of product liability cases have been brought before the courts in industrialized countries. In the USA alone, product liability lawsuits have increased from over 2000 cases in 1975, which marked the first crisis in the product liability insurance market, to over 13 000 cases in the late 1980s (Epstein,... 

These are some current-awareness publications for many safety topics. They include occupational safety and health, products liability, environment, consumer products, food and drugs, workers compensation, nuclear energy, mine safety and health, chemicals, hazardous materials transportation, noise, insurance and loss control, and other topics important in safety and safety engineering. 

When it is time to develop a written budget, it is important to identify operating cost, potential benefits such as direct benefits (e.g., reduced labor cost, lower accidents, reduced insurance cost, or productivity gains). Indirect benefits should also be considered in light of quality improvanents— reduced scrap less rework reduced product liability, exposure, or produa recall expenses improved corporate image or inaeased market share. At times, indirect benefits are improved anployee morale, which reduces absenteeism and turnover or increases teamwork and ownership. The potential reduction in the numbers of compliance penalties can be a benefit. 

The manufacturer of the monitoring system must also take out a suitable liability insurance policy (operational liability 2.5m Euro cover, product liability a minimum of 2.5m Euro cover). This should explicitly include liability for follow-up costs that emerge from false leak alarms in intact liners during acceptance measurement or the period of guarantee. The basic rule is that a leak alarm requires compulsory trial pitting, inspection and repair. 

The Products Liability Insurance policy is designed to cover this type of... 

Product liability extends the protection to all consumers of the organisation s products or services, and is therefore primarily concerned with the protection of the money asset. This asset may suffer accidental losses directly because of increased insurance premiums that reflect large compensation payments, or indirectly because of adverse publicity which is detrimental to the organisation s image. 

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