Ideally located in Asia and gateway to China Mainland, Hong Kong has developed into an international hub, playing a critical role in international trade. As a result, 35% of the registered companies in Hong Kong are in the import/export of products. As exporter, companies will need to obtain specific cover particularly the product liability insurance.
At Clema Risk Solutions, we focus on providing comprehensive product liability insurance for Hong Kong businesses at a competitive pricing.
What is product liability insurance?
In short, product liability insurance provides protection against sums which manufacturers, distributors or sellers shall become legally liable to pay because of damages caused by their products to third parties.
What is covered in the product liability insurance?
The product liability insurance covers the financial compensation awarded to third parties because of bodily injury or property damage resulting from the use of a covered product.
Despite definitions of bodily injury or property damage vary, it shall include some key expenses. As instance, bodily injury shall cover medical expenses, loss of income and the pain and suffering whereas property damage shall cover the value of physical damage, repairs and loss of profit due to damages.
In addition, the policy should cover the costs and expenses of litigation such as lawyer’s fees, investigation costs and experts’ fees.
What is not covered in the product liability insurance?
This is important to understand that product liability insurance will in any case NOT cover the following:
Your product itself. What is covered are the consequences of the defect only.
The performance of your product. Product Liability Insurance will not cover your product if it has failed to deliver the results. Products Liability is not intended to be a “Manufacturers Guarantee”
The above are considered as business risks hence they could not be insured.
Who is buying product liability insurance in Hong Kong?
Even though, product liability insurance is not all the time a contractual requirement, most of the sourcing companies, distributing companies or manufacturing companies buy product liability insurance.
They know that if they fail to deliver a SAFE product, they can end up facing legal action by anyone who has been injured or had their property damaged by their products.
Who are the main insurance companies in Hong Kong underwriting product liability?
Product liability insurance is a common product within the Hong Kong insurance market. The main players are the US insurance companies such as AIG or Chubb but as well some European companies such as AXA or Zurich and many more. Product liability insurance is highly technical, and wordings vary between insurers. It is therefore important that the policy is built tailor made to your needs and that scope of cover is set up to answer all your exposures.
At Clema Risk Solution, we work with the main players in this sector so that we can give our clients a comprehensive view of the market.
What are the information we need in order to get a quote?
Hazards associated with products could differ a lot depending on the nature of the item, its origin, its destination or its lifetime span. Consequently, insurers will request information about the revenues per product and per geographical area, about the quality control, about the experience of the insured.
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