Of late, Airlines have tied up with Insurers for offering travel insurance to its customers, LPG Distributors for any loss and/or damage due to LPG connection by its customers, Mobile Manufacturers have tied up with insurers for insuring mobiles being sold against theft/accidental damage, Power Companies tied with insurers for offering risk cover against any accident caused due to short circuit to its subscribers and so on. This is a novel concept whereby manufacturer or distributor of a product tie up with an insurance company for offering certain insurance benefits to its customers. The premium is usually paid by the manufacturer or distributor and insurance is offered as an “Add-On” or the insurance charges at a nominal rate are levied in the Sales invoice.
Insurance Encyclopedia
Product Pricing
Product pricing is the determination of the actual office premium. This will take account of current market conditions.
Product recall coverage
Coverage for the costs of recalling a product known, or suspected to be, defective. Often added to or in conjunction with CGL policies.
Product recall exclusion
A product liability exclusion of the cost incurred by the insured in recalling injurious products from customers and distributors. The costs are insurable under product recall insurance. See also PRODUCT RECALL PLAN.
Product recall insurance
An ‘extra expense’ cover indemnifying the insured for costs incurred in recalling a product suspected of being injurious to customers and users. Recall costs include communications, transport, warehousing, inspection, overtime, even destruction and so on. Cover is triggered by the decision of the insured to recall the product because of its potentially harmful nature. Cover applies to accidental causes not design faults. Companies should maintain a product recall plan.
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Insurance which indemnifies the insured for the cost of recalling products known or suspected to be defective.
Product recall insurance (Liability Insurance)
Insurance that covers the costs involved in recalling defective or possibly defective products made by the insured.
Product Recall Insurance for Liability Insurance
The policy indemnifies the insured for recall expenditure incurred by insured. The cover includes costs such as customer notification, shipping costs and disposal costs. Coverage generally applies to the firm itself though additional coverage can be purchased to cover the costs of third parties. This policy is usually purchased by manufacturers such as food and beverages, toy, automobile parts manufacturer and electronics companies.
Product recall plan
A manufacturer’s plan to enable him to action a product recall situation immediately on becoming aware that it is necessary or prudent to withdraw a dangerous product. Tracing, identifying and handling products need to be pre-planned to minimise cost and risk. The plan is a vital risk management tool.
Product tamper insurance
Protects manufacturers who are the victims of product contamination or the threat thereof. The insurance pays the cost of stock destruction, business interruption and product rehabilitation. There is no cover for third party injury (see PRODUCT LIABILITY INSURANCE) or extortion payments (see PRODUCT EXTORTION INSURANCE). Consultancy services are usually available through the insurer. Food manufacturers and leading retailers are the most likely victims.
Production credit
New insurance policies (volume) or existing premiums that are ascribed to an insurance agent, broker, or group representative.