Covers the insured’s legal liability to replace, rework or recover products that have failed to perform their intended function after delivery to a customer. The policy is claims-made with co-insurance as standard, and product recall as an option. The policy may back up the insured’s written guarantee to his customer for a one-off product such as chemical plant or be used to support a guarantee of a company’s products (e.g. wall ties).

Exclusion of liability arising from ‘products’ supplied by the insured. This can appear both in public liability and professional indemnity policies. The risk is insured under a products liability policy. The dividing line between the products and public liability policies is important. In the public liability policy the exclusion does not apply to products still in the insured’s custody and control.

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.

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.

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.

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.

Professionals who provide trustee services as a business.

A legal expenses insurance for professional fees (including those of a firm’s accountants) for representing the insured’s interests in the event of being subject to an in-depth investigation by the IR. Also covered are appeals against VAT assessments made by HM Customs and Excise. Cover includes personal protection for individual directors, partners and the self-employed where there is likely to be overlap of the investigation into the individual’s own affairs. Cover usually extends to include the cost of fees that may be incurred by the insured in dealing with PAYE Audit Investigations.

(PI) Claims-made cover protecting professionals’ against civil liability arising from a breach of professional duty subject to an annual aggregate limit. Insured’s own costs are covered in addition. The policy eliminates claims due to matters occurring before the retroactive date and occurrences and claims reported after expiry unless reported within an extended reporting period. Extensions include loss of documents cover. See PROFESSIONAL FEES LEGAL PROTECTION; PROFESSIONAL NEGLIGENCE; MEDICAL DEFENCE UNION.