Product liability and product recall insurance—essentials

Produced in partnership with Mark Everiss of Eversheds Sutherland and Naz Gauri of Eversheds Sutherland

Practice notes

Product liability and product recall insurance—essentials

Produced in partnership with Mark Everiss of Eversheds Sutherland and Naz Gauri of Eversheds Sutherland

Practice notes

What is product liability insurance?

Product liability insurance provides an indemnity to a business in respect of legal liability to the end-users of the products which it either manufactures or sells. Broadly speaking, this liability arises under the tort of negligence (see Donoghue v Stevenson), the strict liability regime imposed by the Consumer Protection Act 1987 (CPA 1987) or under contract (either expressly or pursuant to a term implied by the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982 or the Consumer Rights Act 2015). The essence of the cover provided is for liability arising out of personal injury or physical damage to property. Product liability cover does not usually extend to cover damage to the defective product itself or to pure economic loss.

Product liability insurance is not compulsory and there is not a single ‘standard form’ product liability policy, but a number of off-the-shelf products are available, often combined with public liability and/or general liability insurance. For larger insureds with

Mark Everiss

Partner, Eversheds Sutherland

Mark Everiss focuses on insurance and reinsurance policy wording and coverage advice and disputes. Mark has handled many significant cases both in the High Court and in arbitration involving various business lines, including third party liability, onshore and offshore energy, financial institutions, product liability, D&O, cyber and warranty & indemnity, as well as reinsurance disputes in the live and legacy markets.

He is recommended in The Legal 500 UK 2022 edition and Chambers 2022 Edition, and has been described as bringing "‘unrivalled expertise and sound judgement’ as well as ‘a wide knowledge of the reinsurance markets in the UK and internationally.’" He is also recommended in UK Legal Experts and Euromoney's Legal Media Group's Expert Guide for Insurance and Reinsurance.

Mark has been a director of the Insurance & Reinsurance Legacy Association since 2007.

He is a regular speaker at Insurance & Reinsurance events and Conferences and has spoken regularly on UK EL issues, the Insurance Act 2015, follow the settlements/aggregation issues, warranty & indemnity insurance and the conduct of arbitration in London.

Naz Gauri

Solicitor, Eversheds Sutherland

Naz specialises in all aspects of (re)insurance dispute resolution, advising on a range of insurance product lines. These include financial/professional, political and trade credit, product liability, property and specialty risks.

He represents a variety of clients before the courts and arbitral tribunals. His cases are generally high value and complex, with a multi-jurisdictional dimension.

Naz is regularly recognised by legal directories as an expert in (re)insurance litigation. A recent client testimonial in Legal 500 2023 stated the following:

“Naz Gauri is a rising star in the team. He is client focused, technically outstanding and delivers on his promises – particularly when there are tight timescales. I would recommend Naz to anyone.”

Leading commercial publications often cite Naz’ comments on topical insurance and reinsurance issues. These include City AM, Insurance POST and the Wall Street Journal.

Jurisdiction(s):

United Kingdom

Key definition:

Liability insurance definition

What does Liability insurance mean?

Commercial insurance covering the risks against a third-party claim, or in case of employer liability insurance, claims by employees.

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