Product liability

Product liability is designed for companies that offer services or products, or the activities of which may cause losses after the service, product or activity has been passed over to its clients. 

What is the product liability and who needs this cover? 

Product liability is a specific class of liability insurance that is necessary in situations where an error made in manufacturing process or activity reveals itself only after the product, service or activity has been passed over to consumer. Cover includes losses that incur in situations where the product used by the company causes damages to a third person.

Salva’s product liability covers the following products and services:

  • fuel dealers in case the substandard fuel sold by a dealer causes damages to vehicles;

See for detailed insurance terms and conditions and the scope of cover here.

  • car repair shops that need protection in situations where losses caused by repair works reveal themselves after the repaired car has been passed over to the client;
  • operators of catering facilities in case the food served causes damages to consumers;
  • wholesale and retail distributors whose activities or errors in a product’s safety or content manual may cause damages to the consumers of this product.


What is the difference between product liability and general third party liability?

General third party liability covers the losses that are caused primarily by direct actions and reveal themselves already when the activity, service or product is within the sphere of influence of the company – e.g. the vehicle is dropped off the hoist in the car repair shop; catering staff spills the food on client’s clothing. 
Product liability covers the losses that reveal themselves after the product or service has been passed over and has left the manufacturer’s/service provider’s sphere of influence. It is assumed that the factor underlying the loss occurred in the manufacturing process – e.g. a screw blot remained loose during the repair works and therefore the oil flows out of the engine, causing damages to the engine. An example of product liability is a situation where the food consumed in a catering facility causes poisoning. 

Should the product liability be purchased separately or together with the general third party liability?

Certain areas can be covered only with product liability, meaning that the manufacturing process or the activity is not covered but losses that reveal themselves after the product or service has been passed over to the client are covered. E.g. retail or wholesale distribution or the manufacturing of a specific product. Also, some areas can only be covered together with general third party liability – e.g. catering facility operation, car repair shop.

Which losses can be covered by product liability?

Product liability can only cover property losses or personal injuries and property losses.