Product liability claim news
03/03/2009

Lloyds of London warns against reducing claims cover

Insurance giant Lloyds of London has warned that companies trying to survive the recession may face threats from their attempts to adapt, including greater exposure to product liability claims.

The reason for this is two-fold; attempts to reduce costs by running cheaper measures to prevent spills and leakages could allow such events to occur, contaminating products that could then be central in a faulty product injury claim, and reducing coverage against such compensation claims may cause greater financial pain to the company should one succeed.

Lloyds links this to environmental liability claims, which may be more costly as European law is tightened up, and to a range of risks under other areas such as corporate governance and employment law.

As a result of this, it is argued that paring costs back too far, with regard to product liability claims or any other area in which litigation may arise, may be a false economy.