Does Product Liability Cover Defective Products?

“Defective product” can describe several allegations: unsafe design, a flaw in one production unit, or inadequate instructions or warnings. The Insurance Information Institute identifies each of these as potential sources of product-liability exposure. Liability insurance responds to covered legal claims for injury or damage, not simply because a product fails to meet a buyer’s expectations.

An illustrative ISO CGL form separately excludes damage to the insured’s own product, and it also contains exclusions that may affect faulty work or recall expense. Read the definition of products-completed operations and the damage-to-your-product, damage-to-your-work, and recall wording in your actual form. Whether damage to other property qualifies can depend on physical injury and the impaired-property wording. Ask the insurer about the exact allegation rather than assuming a defect by itself creates covered damage.