The product guarantee policy is designed to protect the insured against legal liability arising out of failure of products to fulfill their intended function. The policy will pay for (i) The cost of repairing or replacing a defective product, (ii) The cost of recalling defective products (iii) The financial losses caused by such products where there is no injury to or damage to property of third parties. Extension is available to pay for insured’s lost sales as a result of damage to the brand name of the product, advertising expenses already incurred, advertising expenses to re-launch the product etc.