Hall of Shame – No Products Liability Coverage for Chemical Company

This scenario represents an actual coverage flaw in the manufacturer insurance program of a well run, profitable business.

A manufacturer of specialty and fine chemicals, laboratory products, monomers, polymers, microscopy, histology, biotechnology, electronics and specialty products purchased an “Excess Products Liability Policy” to increase their depth of protection against lawsuits arising out of the sale of their product.

The Problem

The policy sold to them included the following exclusion removing coverage for any claims arising out “hazardous substances” defined broadly as follows:

What was Really Troublesome

The client could not think of one product they sold which did not fall within this definition and therefore came to the conclusion that they paid for policy with NO PRODUCTS LIABILITY COVERAGE!  

The Solution

Simple….Negotiate the removal of this exclusion.  The intent for coverage was there but the policy was not issued correctly.  Unfortunately, the claims department at the insurance company does not take into consideration “underwriter intent”.

How KMRD Can Help:

KMRD delivers risk management and human capital solutions to over 600 clients nationwide. Our award-winning team, disciplined approach, proven processes, combined with our risk management portal make KMRD the leading choice to improve business protection and reduce the overall cost of risk.


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