In the process of its activity, any manufacturer may encounter some shortcomings of the provided services or manufactured products. In order to reduce the amount of possible payments to compensate for the damage, use the liability insurance of the producer.
Insurance object
The contract is drawn up between the insurance company and entrepreneurs, enterprises, organizations, private companies that produce products, provide services, perform work and can cause harm through their actions. In case of insurance of civil liability of producers, the profile organization takes responsibility for possible losses caused to property interests, health, life threat as a result of poor-quality products or work performed, services provided.
To conclude a contract, the policyholder is required to provide information on his activities. The signed agreement on liability insurance of the producer for the quality of the products must contain all types of goods that are produced by the contractor, a list of the work performed and the range of services provided.
Basic conditions
In order for the insurance company to assume the risk of liability, the goods or services provided must comply with the main conditions of the contract. The policyholder is required to present official documents that confirm the right to produce the types of products specified in the civil liability insurance contract, to sell them or to supply them. If the object of insurance is work or services, then the client must confirm his right with licensing licenses or other official documents.
When insuring the liability of the producer for the quality of products, the client of the insurance company must confirm it on the basis of technical documentation with the presentation of certificates or conclusions of independent experts on compliance with the standards. The policyholder has the right to submit documents that confirm the list of organized activities to comply with production technologies or work.
Insurance events
As a result of errors or shortcomings in the production of products or the provision of services, damage to the state of health, life threat, property damage to third parties or the environment are possible. In case of liability insurance of a service producer or producers, the following events are considered insurance:
- Inconsistency of the released goods, services rendered, works performed with the approved certificates, contracts, technologies;
- the impossibility of using the product for the purpose for which it was released;
- insecurity of work performed, services provided, manufactured products;
- detection of hidden breakdowns and defects during use of the goods;
- incomplete or inaccurate informing buyers and customers about the products, the scope of work performed and the scope of services.
Insurance claims
In order for the insurance company to be able to meet its obligations, the insurance event that has occurred must comply with the approved terms of the producer liability insurance contract.The fact of causing property loss is confirmed by official documents from the relevant organizations or a decision of the court is provided. Mandatory time of harm must fall under the term of the contract. Also, the resulting loss should directly depend on the goods produced, sold, used, or the results of the services provided, work performed.
In case of liability insurance, the classification of damage for which payment will be accrued is distributed as follows:
- disability, injury, deterioration in health, life threatening;
- moral damage, if indicated by a special clause in the insurance document;
- property losses, confirmed by documents and conclusions of experts;
- damage to the environment, confirmed by the conclusions of sanitary and environmental services.
The insurer's liability area also includes expenses that the client will make to reduce the amount of damage, if such actions were performed in accordance with the terms of the agreement. In the case of civil liability insurance, the types of risks are agreed upon by both parties to the contract process and all may be included or selected individually.
Refusal to charge compensation
There is a list of events upon the occurrence of which the insurance company will not be liable to the injured persons, namely:
- Military action, riots, strikes, terrorist violations.
- The use of the purchased goods is not for their intended purpose, which led to an accident.
- Defects of a manufactured product or work performed in advance known to third parties.
- Failure by the policyholder to provide data containing information on the unsafe quality of the manufactured products.
- Violation by state structures or other professional departments of the existing legislative acts.
- Violation of the terms of technical training by the insured employees, lack of specialized specialization or inadequate health conditions.
- No risk in the insurance contract.
Amount of liability
In case of liability insurance of producers, the insurance amount is determined by the parties to the contract. The amount of liability may be in two versions:
- The non-aggregate amount is determined for a separate insured event. In case of an insurance event, payment will be made no more than the amount specified in the contract.
- The aggregate amount is set for all insurance events. The contract may terminate ahead of schedule if the entire amount of liability has been paid in cases that have occurred.
Insurance payment
In case of liability insurance of producers, the insurance fee is paid to the bank account within the time periods specified in the signed agreement. The premium is calculated on the basis of basic tariff rates with the subsequent use of raising and lowering coefficients, the size of which depends on the degree of risk, insurance history, and insurance period.
The contract is usually concluded for one year, followed by extension. At the same time, there is the practice of concluding agreements for several months, for the period of performing a certain amount of work or rendering services.
The insurance premium must be paid in accordance with the producer’s liability insurance contract with a one-time payment or quarterly.
Validity period
The liability of the insurer comes from the day following the day the insurance premium is transferred to the company account, or from the date specified in the document. However, if at the time specified in the contract, the funds were not received in the bank account of the financial company, the policyholder will be liable for the events that have occurred.
The agreement expires:
- In accordance with the terms of the agreement.
- If you do not pay the subsequent part of the insurance payment.
- When paying the full amount of security.
- Liquidation of one of the parties to the contract.
- As a result of the deprivation of the license of the insurer for this type of activity.
- In other legal situations.
Liability insurance of producers for the quality of manufactured products or work performed is a relatively new type. The presence of such an agreement will allow the production company to reduce possible losses in the event of unforeseen situations.