Products liability coverage in Hong Kong is a type of insurance that covers liability arising from goods sold or supplied, that cause injury or damage to customers or their property.

It is not so much what the product is or is called as what it is used for that defines the exposure.

The insured’s products can generally be defined as goods or products, including any container and instructions for use after they have ceased to be in possession of, or under the control of, the insured. These products include those manufactured, constructed, installed, repaired, serviced, treated, sold, supplied, or distributed by the insured.

If you are involved in manufacturing, distributing or selling a product or even a minor part or component of it, then you need it.

The risk will be greater if you are involved in products that are consumed, safety-critical parts, or complex in nature. We live in a litigious world, so you should not take it for granted that your business is safe nor should wait until your client asks you for details of your insurance as they want to make a claim!

A major benefit of having PL cover is that your insurer will cover what can be extreme legal costs in defending you in court.

Given the increasing costs of many court awards and the fact that they will only be awarded at some point in the future when the claim is settled rather than in the present when the claim occurs, indemnity limits should be as high as possible, having regard to the cost of buying such limit of indemnity and willingness of underwriters to offer such limits.

The premium level for a specific risk partly depends on the limit of indemnity selected. The other main underwriting factors are the product type, turnover and geographical exposure.