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Nutraceutical Insurance Coverage in Utah
Herbal product companies realize the benefits of protecting corporate assets from potential lawsuits. The purpose of Products Liability Insurance is to provide coverage for your company in the event a claim is made against it by a third party, during the policy term, alleging Bodily Injury or Property Damage arising from your product.
This insurance will respond to settlements/ judgments and defense costs. It is important to note that defense costs are often included within the policy limits and will reduce the amount of insurance available to cover the settlement/ judgment.
There are limited insurance markets that underwrite Product Liability coverage for Herbal Products risks, especially those in the higher hazard areas of herbal formulations and vitamins/supplements. Each market will have its own policy form; however, there are certain key issues appearing in all policy forms which merit particular attention. These issues include:
- Claims Made vs. Occurrence Forms
- Retroactive Dates
- Limits (Aggregate and Each Occurrence)
- Exclusions (Standard & Supplemental Policy Terms)
- Coverage Extensions
- Coverage Territory
Many insurers utilize a claims-made policy form almost exclusively for this type of Product Liability. With this form ***** , the date of injury and the date a claim is actually reported to the insurance company are dual “triggers” of coverage; both dates must fall within the covered policy period. in the event that the policy is either canceled or not renewed, an extended discovery period for incidents occurring during the covered policy period, but reported after the cancellation of the coverage, may be purchased.
For insureds selling a product outside of the United States and Canada “coverage territory” and the “jurisdiction for suit” definitions in the insurance policy are very important. Most policies will cover injury to their parties that occur overseas as long as the insured manufactured or distributed the product in the United States. However, the suit itself must be brought through the U.S. court system; if a suit is brought in a foreign jurisdiction, the policy will not respond. Some insurance companies can offer true “worldwide” policy forms. This is an area that should be discussed in detail if you anticipate generating foreign revenues.
While it is impossible to list all possible types of incidents which could give rise to a claim, claims do tend to be “categorized” in the following areas:
- Unknown Adverse Side Effects
- Improper Use of the Product
- Inadequate Purification
- Liability assumed via Indemnification and Hold Harmless Agreements
- Product Tampering
- Improper/Out of Date Instructions or Labels
- ”Deep Pocket” Theory
The preceding overview is very general in nature. We would welcome the opportunity to assist you in selecting the appropriate coverage based on your own specific concerns and needs.