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For two hundred years, the modus operandi of the insurance industry has been to follow the status quo. Today, protecting and growing your business demands a new perspective. It is time for a different way of looking at risk.
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Koru offers peace of mind by building and managing efficient risk management solutions that align with our clients’ business objectives.
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Products liability insurance is a type of insurance coverage that provides protection to businesses against financial losses resulting from the production, manufacturing, distribution, or sale of defective products. This insurance product is designed to cover a wide range of risks associated with product liability, including bodily injury, property damage, and personal injury caused by defective products.
Coverage Scope
Coverage for Injury or Damage: Products liability insurance covers claims arising from injuries or property damage caused by a defective product. This can include bodily injuries, illnesses, or property damage resulting from the use or consumption of the insured product.
Manufacturing Defects: It protects against claims related to defects in the design or manufacturing process of a product that render it unsafe for consumers.
Labeling and Packaging Errors: Coverage may extend to claims resulting from incorrect or inadequate product labeling, warnings, or instructions that lead to harm.
Failure to Warn: If a product has inherent risks that are not adequately communicated to consumers, products liability insurance can provide coverage for resulting claims.
Legal Defense: The policy typically covers the legal costs associated with defending against product liability claims, including attorney fees, court expenses, and settlements or judgments.
Importance
Risk Mitigation: Products liability insurance helps businesses manage the significant financial risks associated with potential product-related injuries or property damage, reducing the impact on their financial stability.
Legal Compliance: Having products liability insurance can demonstrate a commitment to responsible business practices and may be required by law or regulation in some industries.
Protection of Reputation: In the event of a product recall or liability claim, insurance can help protect a company's reputation by enabling swift and professional responses to address the issue.
Marketplace Expectations: Many clients, distributors, and retailers may require businesses to have products liability insurance before they will carry or sell their products, especially in industries with high product liability risks.
Each year, contractors face an increasingly diverse array of exposures and a growing list of options for managing those exposures. A common solution is the transfer of risk via a portfolio of insurance products—but coordinating the purchase of multiple insurance products is often complicated by the inconsistency in coverage terms between different insurers. This is especially true of professional liability policies.
According to a Moody's Ratings survey, reinsurance buyers are showing a strong preference for catastrophe bonds, with over 80% expecting to use them in the coming year, marking the highest demand in four years. Sidecars are also expected to see elevated demand, while collateralized reinsurance remains attractive but slightly less preferred than the previous year. Despite the shift toward alternative capital markets, buyers still value long-term relationships with traditional reinsurers.
Fitch Ratings expects strong growth in the alternative reinsurance capital market, particularly for catastrophe bonds and other insurance-linked securities (ILS), into 2025, unless significant catastrophe losses occur in the second half of 2024. Investor demand remains high due to attractive returns and limited recent loss activity, with a growing interest in private ILS and collateralized reinsurance.
The insurance-linked securities (ILS) market set new records in the first half of 2024, driven by strong demand from investors and robust catastrophe bond issuance, with over $12.3 billion issued across 49 transactions. Despite heightened catastrophe activity and significant insured losses, the ILS market remained resilient, with minimal impact on outstanding bonds. Swiss Re notes that the cat bond market continues to offer attractive relative value, with strong returns reflecting sustained investor confidence.
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