In Product Liability, coverage applies when?

In the context of product liability coverage, the key component is that the liability arises from the product being out of the control of the manufacturer or seller. This means that once a product has been sold and is no longer in the possession of the insured, liability can still be triggered if the product causes harm or injury due to defects or shortcomings.

When a product is out of the insured's control, it indicates that the insured has fulfilled their part of the transaction, and any issues arising from the product's design, manufacturing, or warnings come into play. The insurance coverage is designed to protect the insured from claims related to damages caused by products they have produced or sold, even if they no longer have possession of these items.

In contrast, when the product is still in the control of the insured, liability concerns might be based on different considerations, such as potential negligence related to its handling or storage. A voluntarily recalled product indicates that the manufacturer is acknowledging some defect, and coverage may be limited depending on the circumstances surrounding the recall. If a product is destroyed in an accident, this would involve different aspects of insurance (possibly property insurance) rather than product liability. Thus, the coverage primarily pertains to situations where the product has already been distributed and can pose risks