Вы находитесь на странице: 1из 32

AEROSPACE PRODUCT

LIABILITY MANAGEMENT
SYNDICATE 5555
FROM JET ENGINES TO STAIRWELLS,
WE’LL SEE A WAY TO INSURE THEM.

IT’S OUR POLICY TO SEE THINGS DIFFERENTLY


CONTENTS

Introduction 2

Why read this brochure? 4

What is product liability? 6

– Product liability based on breach of contract 8

– Product liability based on negligence 12

– Product liability based on strict liability 14

Litigation overview 16

Reducing your exposure 18

Role of your broker 25

Your insurance policy 26

Further information 28
INTRODUCTION

We all have legal duties to those and minimising the number of claims You should always read your policy
who may be affected by our acts and which in turn is reflected in the level carefully to establish the extent of
omissions. Product liability is nothing of insurance premium payable by you. coverage afforded and if you would like
more than an extension of those duties to discuss any policy issues or raise any
Your insurance policy is effectively
to those who produce, repair, service questions you should do this with your
your last line of defence when other
or maintain products, regardless of insurance broker in the first instance.
risk minimisation measures have not
whether those products are whole
been successful. Having said that, Please note, though, that the legal
aircraft, engines, minor parts thereof,
there may always be unfortunate and practical material in this brochure
equipment, or other materials such as
circumstances giving rise to liability is basic and summary in nature and,
manuals, computer materials and so on.
claims which may need to be referred therefore, should be treated as a
This brochure provides a broad to your insurers, no matter how well description of the tip of the iceberg
overview of product liability issues prepared you are. only. If you require further information
which may arise in relation to aviation you are recommended to seek external
Where we are your lead insurer, we
products and services. advice from specialists.
will look at all claims sympathetically
It focuses also on the potential to and bring experience, professionalism,
reduce product liability exposure by imagination and enthusiasm to
implementing some straight forward resolving claims related issues. We will
risk management measures outlined endeavour to understand your business
in the Reducing your product liability and will do our best to enhance it
exposure section. through the provision of appropriate
support. We emphasize continuity
This may be of benefit to you in a
and value long standing relationships.
number of ways: through ensuring
the highest possible reputation for A brief outline of the general types
your products or services, minimising of coverage afforded by a standard
the number of potential disputes products liability policy is contained
between you and your customers, in the final section of this brochure.

2
3
WHY READ
THIS BROCHURE?

For a long time, product liability The legal process may help you, but may be being ordered by a court to
was a problem only for those doing sometimes the law can be tough. Did pay substantial damages when you
business in the USA. Now, it is you know, for example, that when a knew, but couldn’t prove, that there
becoming a significant issue in claimant wins a product liability lawsuit was no defect in your products or
Europe and elsewhere. against several different defendants, workmanship. At best, the penalty may
he is entitled to require just one of simply be the considerable burden of
Your organisation’s exposure to a
those defendants to pay 100% of the wasted management time and wasted
product liability lawsuit begins every
damages he is awarded, even if that legal defence costs incurred in proving
time any product you have made,
defendant was held by the court to be innocence rather than staying out of
modified, serviced or repaired leaves
only 10% responsible for the loss? the courts altogether. In either case,
your works. Should an aviation
reputational damage is likely and
accident occur, the involvement of On other occasions, the legal process
impossible to quantify.
any of those products may lead to can backfire and blame the poorly
unwanted attention from those prepared, even if innocent of
seeking to fix blame. wrongdoing. At worst, the penalty

4
The purpose of this brochure is not to
help those guilty of wrongdoing to win
cases. Such cases are best settled early
and fairly. Instead, its purpose is to
help prevent your organisation from
ever being undeservedly penalised by
the courts in a product liability lawsuit.

Our message is a simple one.


Manufacturers and service providers are
often pulled into, and hurt by, product
liability lawsuits because their key
employees do not know enough about
the law and the litigation process to
avoid committing the types of common
The closing section of the brochure
errors that lose lawsuits and increase
refers to your last line of defence, your
the amount of damages awarded.
product liability insurance policy. Please
By learning a little about the basics refer to this section for the general
of product liability law and the judicial types of coverage your policy may
process, it will be possible to provide, bearing in mind you must
appreciate and identify the steps always carefully consider your insurance
which can be taken now to reduce policy documentation and seek
the exposure of your organisation guidance from your broker, in the first
to product liability risk. instance, relating to any policy issues.

5
WHAT IS
PRODUCT LIABILITY?

Whenever you undertake work on a ● BREACH OF


customer’s product (or supply/ manufacture CONTRACT/WARRANTY
a product or service) the law creates liability.
Liability arises where the workmanship
This will be for physical injury and property (or product quality) represents a failure
damage/financial loss arising out of your to comply with the requirements of
supply of that product and/or service in contractual promises relating to the
three possible and distinct (and sometimes standards of that workmanship (or
overlapping) ways: product quality).

● NEGLIGENCE
Liability arises where the workmanship
(or product quality) is defective by
reason of a failure to exercise the
degree of care required by the law.

6
● STRICT LIABILITY
Liability arises where statutory prerequisites
are fulfilled, regardless of whether or not
any breach of contract or act of negligence
was present.

This brochure looks at each of the above


theories of liability in more detail, before
giving an overview of some key aspects
of product liability litigation, and closes with
some guidance on how you can reduce your
product liability exposure.

Every country has its own laws relating


to liability for loss or injury resulting from
the supply of defective products or
workmanship. The legal sections of this
brochure are written from the perspective
of English law. Outside of England, the law
may be different in its detail, but its overall
impact will not be.

7
PRODUCT LIABILITY BASED
ON BREACH OF CONTRACT

8
A contract comes into existence Exclusions of liability can be included
whenever one person accepts an order in the contract to deal with deemed
for the design, manufacture and/or (implied) terms as well as liability issues
supply of goods and services in return generally, but it is important to note
for a payment, even where no formal that the law imposes limits on their
document is ever signed by the parties. effectiveness; for example, the law
will not allow a seller to escape liability
Product liability will arise whenever the
for death or injury resulting from his
supplier has breached a promise in the
negligence by inclusion of an exclusion
contract regarding the quality of the
clause to that effect.
work he undertook; for example,
a written promise (known as an Similarly, where a seller tries to create
express warranty) in the contract that immunity from liability for property
workmanship and/or products supplied damage or financial loss resulting from
will be free from defects. his breach of contract and/or negligence
by including a clause in his contracts
Even if the contract is silent on quality
to that effect, the law will not enforce
issues (i) Sale of Goods legislation
such a clause against the buyer unless
deems that (where the supplier knows
it meets a test of reasonableness.
the product will be used for a particular
purpose) the contract includes a term
that the goods supplied will be of
satisfactory quality and fit for that
purpose; and (ii) Supply of Goods and
Services legislation requires that the
services supplied will be carried out
with reasonable care and skill.

9
FREQUENTLY ASKED QUESTIONS BASED ON BREACH OF CONTRACT

Who can sue for product liability based on breach of contract?

Generally, only someone who is a party to the contract, but recent legislation allows third parties deriving certain indirect
benefits from the contract to sue as well.

Is there a time limit for bringing a product liability claim based on breach of contract?

Yes, there are two different time limits.

First, personal injury claims must be lodged in a court within 3 years from the date of the injury or date of knowledge
(or date the claimant should reasonably have become aware) of the breach of contract.

Second, property damage/financial loss/loss of profits claims must be brought within 6 years from the date of the
breach of contract.

Where can we be sued for breach of warranty/contract?

Generally, if the contract parties have chosen a particular jurisdiction for disputes to be heard in, the supplier will
be sued in that jurisdiction.

If no court has been selected, a supplier will not necessarily be sued in the courts of its own country. For example, if a
dispute were to arise from a breach of a contractual obligation which occurred in the USA, a plaintiff may be able to sue
a UK based supplier in that jurisdiction.

What terms does the law automatically incorporate into contracts, even if not discussed by the parties?

The law will automatically include in the contract a term that the product is of a satisfactory quality. This means that it must
meet the standard that a reasonable person would regard as satisfactory, taking into account its description, the price and
any other relevant circumstances. If the supplier knows that the product will be used for a particular purpose, the product
must be reasonably fit for that purpose.

10
Will our standard terms of trading apply if we print them on the back our invoices?

No, unless brought to the attention of the buyer before his order was accepted.

Whose standard terms of trading will apply if both parties send their terms of trading to each other?

Depends on the facts. It may be the last party who submitted his conditions to the other party. It may be neither.

Can we protect ourselves in our contracts from the claims of end users (eg passengers) of the products we work on/supply?

Yes. It is not unusual for a supplier to use the contract with his customer to apportion liability for claims of persons who
are not party to the contract to the customer. This is done by use of a customer indemnity.

What happens if the contract does not give an express warranty for our workmanship to our customer?

It is likely that a warranty will be implied into the contract by law; eg that there is an implied term that the supplier will
carry out the service with reasonable care and skill.

Can we use the contract to exclude warranties automatically imposed by legislation?

Yes, provided the correct contract language is used and the exclusions are reasonable.

Can we use the contract to exclude all our potential liability for breach of contract to our customer?

You can exclude some, but not all of your liability. Excluding liability for death or injury resulting from negligence is
unlawful and therefore unenforceable. The same applies to strict liability imposed by statute. Exclusion of other liabilities
(eg for financial loss and/or damage to aircraft) is permissible, provided a test of reasonableness is satisfied.

What remedies are available for breach of contract?

Usually, damages are the only remedy open to the other party to the contract. Those damages can be for economic loss
(including consequential loss) as well as for physical injury.

11
PRODUCT LIABILITY
BASED ON NEGLIGENCE

persons who could reasonably be


expected to be affected by their acts
and omissions. The degree of care
that must be exercised is measured
by reference to the care a reasonable
person would exercise in the same
circumstances. If the negligent act is
committed by an employee during
his work, his employer will be liable
for his negligence to third parties.

Exclusions of liability and indemnities


can be included in any contract to deal
with losses resulting from negligence,
but it is important to remember that
For a long time, an action based on During the 1930s, however, new the law imposes limits on their
breach of contract represented the only theories of negligence were developed effectiveness; for example, the law
legal avenue open to someone affected by the English courts to allow persons will not allow a seller to escape liability
by a defective product/workmanship. outside the contractual relationship for death or injury resulting from his
to sue for damages if they sustained negligence by inclusion of an exclusion
In practice, this meant that the person
financial loss or injury as a result of a clause to that effect in any contract.
responsible for the defective product/
defect in a product or workmanship.
workmanship was immune from legal
liability toward anyone not a signatory As a result, the law now imposes
to the contract for the supply of the a legal duty on everyone to take
goods and services in question. reasonable care for the safety of

12
FREQUENTLY ASKED QUESTIONS BASED ON NEGLIGENCE

Who has the burden of proving negligence?


The claimant has the burden of proving negligence on the ‘balance of probabilities’, except where the circumstances
of the accident seem incapable of explanation on any grounds other than the defendant’s negligence, it will be up to
the defendant to prove absence of negligence.

Can we use the contract to exclude all our potential liability to our customer for negligence?
You can exclude some, but not all of your liability. Excluding liability for death or injury resulting from negligence
is unlawful and therefore unenforceable. Exclusion of other liabilities (eg for financial loss and/or damage to aircraft)
is permissible, provided a test of reasonableness is satisfied.

Is there a time limit for bringing a product liability claim based on negligence?

Yes, there are two different time limits.


First, any claim concerning death or injury must be brought within 3 years from the date of death or injury or from the
date of knowledge (or date the claimant should reasonably have become aware) of the cause of death or injury.
Second, any claim concerning property damage/financial loss must be brought within 6 years of the loss or damage
or within 3 years from the date of knowledge (or reasonable awareness) of the cause of the loss or damage.

Where can we be sued for negligence?

The answer depends on whether there is a contract between the supplier and the claimant. Generally, if there is a contract,
the supplier will be sued in the jurisdiction selected in the contract.
However, if there is no contract, or the contract is silent on jurisdiction, it may be open to the claimant to sue in the country
he is domiciled in, or where the accident took place, or where another implicated party is domiciled.

Are there any defences to a claim in negligence?

Yes, contributory negligence on the part of the claimant and, in limited circumstances, voluntary assumption of the risk by the claimant.

What remedies are available for a claim in negligence?


Damages for direct and reasonably foreseeable losses, with limited recoverability of financial loss arising other than from
physical injury or damage to property.
13
PRODUCT LIABILITY
BASED ON STRICT LIABILITY

Under certain legal rules, liability Perhaps more surprisingly, it also


will be imposed on the producer of a includes anyone who imports a product
defective product irrespective of fault, from outside the EU and supplies/sells
negligence and the absence of any it to another in the EU; for example,
breach of contract, if the product is suppliers who import spare parts from
defective and causes injury. a US original equipment manufacturer
for supply to a customer in the UK.
While such legislation exists for
producers of products in the UK and
EU, none is currently applicable to the
activities of repairers, servicers and
maintenance providers, save to the
extent they act as producers.

The definition of a producer of


a product goes far beyond the
manufacturer of the product and
extends to include anyone who
presents himself as the producer,
for instance by putting a logo on
the product.

14
FREQUENTLY ASKED QUESTIONS BASED ON STRICT LIABILITY

Is there a time limit for bringing a product liability claim based on strict liability rules?

Yes, there are two time limits.

First, any claim must be brought within 3 years running from the day that the claimant became aware or should have become
aware of, the damage, the defect and the identity of the producer.

Second, all claims must be brought within a longstop of 10 years from date of circulation of the product, after which
no claims can be brought, whether or not the claimant had knowledge of the defect.

Can we use the contract to exclude the consequences of strict liability?

No, strict liability cannot be excluded.

Who has the burden of proving that the product is defective on strict liability rules?

The burden of proof lies with the injured person, who is required to prove the defect, the damage and the causal relationship
between the two.

Are there any defences to product liability based on strict liability?

Yes, a producer is allowed several specific defences including:


• it did not put the product into circulation
• the defect did not exist at the time the product was put into circulation
• the defect is due to compliance with certain legal regulations; and

• the state of scientific and technical knowledge at the time when the product was put into circulation was not such
as to enable the existence of the defect to be discovered.

What is the extent of a producer’s liability based on strict liability rules?

Liability under the rules is for death, personal injury and loss of or damage to non-commercial property, but it does not
extend to liability for business loss.

15
LITIGATION OVERVIEW

HOW IS A DEFECT PROVED? HOW ARE COURT DECISIONS HOW ARE DAMAGES
Typically, the following will be relevant:
ABOUT PRODUCT LIABILITY CALCULATED?
MADE? When a defendant is found liable,
• Opinions of experts given to the court
There will be inevitable jurisdictional the claimant is entitled to an award
• Adverse materials in the defendant’s of compensatory damages.
variations:
own documentary records
• The civil court evidential issues This will include:
• Evidence that the
are decided on the balance of
• Actual losses - compensation
product/workmanship was not in
probabilities (i.e. more than 50/50
for physical damage to property,
full compliance with governmental,
in one party’s favour rather than the
consequential losses (eg past and
OEM & industry standards
much tougher beyond reasonable
future out of pocket expenses, loss
• Evidence of other incidents with doubt test used in criminal cases)
of income, etc) and, in the case of
similar facts breach of contract, pure economic
• In England and Wales and many
• Findings contained in official other jurisdictions, decisions are made loss as well (ie loss of profits)
accident investigation reports by judges, but in the US decisions
• Intangible losses - pain and suffering,
are usually made by a jury and past
• Changes made to loss of amenity, loss of expectation
experience shows that juries have a
products/procedures after of life
strong tendency to be generous to
the accident • Future losses - cost of financial
claimants on questions of liability
• Inspection by court of the product and the size of damages awards support of dependants in the case
in question of death of the claimant

• In extreme cases exemplary or


aggravated damages or punitive
damages in the US, for example,
may be awarded (these are generally
insurable)

16
17
REDUCING YOUR
EXPOSURE

Here, the priorities are twofold. First, 1. DO YOU HAVE A MANAGER 2. DO YOU GIVE ANY
reducing the likelihood of product CHARGED WITH SPECIFIC EDUCATION TO KEY PARTS
related incidents and accidents RESPONSIBILITY TO DEVISE OF YOUR WORKFORCE ABOUT
occurring. Second, improving your AND IMPLEMENT PROCEDURES PRODUCT LIABILITY EXPOSURE
ability to defend any claims relating
FOR PREVENTING PRODUCT AND THE RISKS OF NOT
to your products and workmanship.
LIABILITY? FOLLOWING PRESCRIBED
At all times it is essential that you
To be effective, a Product Liability
PROCEDURES?
maintain good lines of communication
with your customers. Prevention Manager must report This can be in the form of distribution of
directly to senior management to written materials, such as this brochure,
With a view to getting a quick
ensure that his concerns and running of training sessions, perhaps
overview of how well geared your
recommendations are not overlooked based on specimen case studies
organisation is to reducing product
by other managers. He must also be revolving around believable scenarios
liability exposure, please consider
vested with a high level of authority involving products of the type regularly
the following questions:
and independence. His responsibilities worked upon by your personnel.
should embrace many, if not all, of the
Video materials can also be used,
items mentioned below.
especially if the organisation runs
In large organisations, it might be a full training exercise involving a
appropriate to form a multi-disciplinary mock accident.
Product/Services Review Committee to
An added benefit of training is that
assist the Product Liability Prevention
associated question and answer
Manager in discharging their functions.
discussions can reveal problems
previously unknown to management/
the Product Liability Prevention
Manager.

18
19
3. DO YOU CREATE THE KINDS Consideration needs to be given as to
OF WRITTEN RECORDS THAT whether the kinds of documents used by
WILL BE USEFUL IN DEFENDING your organisation and the instructions
A PRODUCT LIABILITY LAWSUIT? applicable to their completion etc can
be made more effective. Hand in hand
It is self evident that reliance on the
with this, attention should be focussed
human memory to defend product
on procedures relating to documents
liability litigation should be minimised
which individual personnel may generate
where ever possible. Documentary
outside of prescribed procedures;
records are a daily part of the highly
for example, internal memos.
regulated business of aviation.
Once memories have faded and/or Such documents can have the potential
key personnel have left your to raise issues which, in the absence
organisation, those records may of further documents closing the loop,
provide the only contemporaneous could prove to be circumstantially
means of proving innocence. embarrassing in the future. For
example, if management decides not
to adopt a change in a non-destructive
testing inspection procedure suggested
by a knowledgeable employee in an
internal memo, but does not generate
a second (contemporaneous) document
explaining why the suggestion was not
accepted, your lawyers may find it
harder to convince a court that the
suggestion was properly considered.

20
4. DO YOU HAVE THE RIGHT Time limits for starting a product
PROCEDURES FOR RETAINING liability lawsuit after an accident vary
AND RETRIEVING PERTINENT considerably. Add to this the fact that
WRITTEN RECORDS? years may have elapsed between the
start of litigation and the date that the
Procedures for creating the right kind relevant product left your works means
of written records will be useless unless that it is necessary to keep your
you also have procedures for ensuring documentary records for very long
that those records will still exist at trial. periods of time.

21
5. ARE YOUR CONTRACTS The hidden existence of terms implied
SATISFACTORY? into contracts by law combined with
legal limits on the exclusion of liability,
The contract with the buyer represents
means that all contracts for the supply
the only opportunity for shifting
of goods and services need a set of
certain liabilities away from the seller
interlocking provisions dealing with
to the buyer.
warranties, exclusions of liability and
indemnities. Typically, a well structured
and professionally drafted contract for
the sale of goods and services will
replace warranties implied by law with
well defined, but limited, remedies for
the buyer if things go wrong, while
accepting liabilities which cannot be
excluded, and allocating other liabilities
to the buyer through indemnities.

Conversely, a poorly prepared contract


may leave you with liability for
products you have not manufactured,
no protection from the claims of third
parties, such as passengers, as well as
a liability for your own workmanship
which is unconditional in scope and
unlimited in duration.

22
6. ARE YOUR PROCEDURES FOR In such situations, it is often difficult to 7. DO YOU HAVE THE MEANS
ENTERING CONTRACTS identify which terms have and have not FOR EARLY IDENTIFICATION
SATISFACTORY? been agreed by the parties as part OF INCIDENTS/ACCIDENTS
of the contract. This, in turn, may make INVOLVING YOUR PRODUCTS
Regardless of how perfectly drafted,
it difficult to identify whether a breach
good contractual provisions dealing OR SERVICES?
of contract creating product liability
with apportionment of liability will be The importance of this point is
has occurred and whether the
useless unless properly incorporated twofold. First, to help you use in-
breaching party has any protection
into each contract with a customer. service information to improve your
from liability as a result of other
The same applies to the contracts you products/services. Second, to give
provisions of the contract.
enter into with persons who supply you early warning of the possible
you with goods and services. Therefore, where standard conditions
involvement of your products/services
of trading are used in place of signed
In practice, it is sometimes the case in an incident so that you can be
contract documents, it is very
that the contract between the prepared for the inevitable enquiries
important that sales staff know how
seller/buyer comprises a series of from official accident investigators,
to achieve incorporation and deal with
documents, perhaps intermingled original equipment manufacturers,
situations where a buyer is seeking
with things which have been verbally regulatory authorities and, in worst
to impose his own standard (and
agreed but without any subsequent cases, the media as well.
conflicting) conditions.
written note being produced to avoid
differences of recollection in the future.
Standard conditions of trading of one
or both of the parties may be part of
those documents, sometimes without
written acceptance of their inclusion
in the contract.

23
8. DO YOU HAVE THE ABILITY litigation, it may be appropriate to by the accident, whether passengers
TO CONDUCT EARLY AND conduct two separate internal and their relatives, persons on the
EFFECTIVE INTERNAL investigations, thus maximising ground and so on.
INVESTIGATION OF INCIDENTS confidentiality through available legal
In each case, you need some advance
professional privileges.
AND ACCIDENTS INVOLVING understanding of the things you can
PRODUCTS/SERVICES YOU HAVE and can not and should and should
9. DO YOU HAVE ANY
SUPPLIED? not be doing. Learning on the job is
PROCEDURES TO DEAL WITH
difficult. Pre-programmed procedures,
Once you have learned of an accident AN EMERGENCY INVOLVING
perhaps, accompanied by training are
involving products or services supplied PRODUCTS/SERVICES YOU HAVE necessary if these things are going to
by you, a means needs to exist to SUPPLIED? be properly managed.
process and handle that information
in a constructive manner. If a major incident occurs, things
typically happen very quickly in its 10. DO YOU HAVE PROCEDURES
In the case of serious accidents, it may aftermath. This can be a struggle for FOR RETAINING EVIDENCE IN
be appropriate to conduct an internal the unprepared. THE EVENT OF A CLAIM?
investigation for the twin purposes of
You may find, for example, that you are In the event of an accident or incident
identifying safety issues which need to
receiving unexpected visits from the involving a product which you have
be addressed by the organisation and
police or Air Accidents Investigation manufactured, supplied or repaired,
creating a documentary record of
Branch inspectors (or equivalent the relevant product must be retained
relevant facts and circumstances for
outside the UK) demanding to see for examination at a later date. If a
possible use in a future product
company records and/or interview product is removed and later returned
liability lawsuit.
employees. Likewise, the media may to you by regulators or investigators,
As the second purpose relates to the focus its spotlight on your organisation you must ensure that procedures are
serious possibility of the organisation which, in turn, could lead to early in place to retain that product in its
becoming embroiled in product liability attention from the persons affected current condition.

24
ROLE OF
YOUR BROKER

Your insurance broker should be best


placed to provide you with advice on
the nature and extent of insurance
coverage required in order to protect
your operations. Your insurance
broker's advice may not be limited to
the adverse economic consequences
of the risks to which your business is
exposed in its day to day operations.

Under English law, the insurance


broker is the agent of the insured
client and the broker is tasked with
representing the insured client’s
interests. However, the insured client is
of course also the client of the insurer
once an insurance policy has been
purchased (as a result of the insurance
broker’s advice and representation).

The broker should not only use their


expertise to advise the insured client
how to obtain insurance coverage on
the best possible terms, but also if and
when there is a claim under the policy,
they should assist with the timely
provision of information to the insurer
and also with the expert management
and resolution of claims.

25
YOUR INSURANCE POLICY

PRODUCTS LEGAL LIABILITY THE POLICY: A BROAD EXAMPLE DUTY TO NOTIFY CLAIMS
INSURANCE OF THE KIND OF COVERAGE A It is very important that you inform your
Your last line of defence will be your
POLICY MAY PROVIDE insurer of any potential claims as soon
products liability insurance policy A typical product liability insurance as possible after you become aware of
Should any circumstances arise that policy will offer you protection in them. Your policy may stipulate that
might result in a claim against your instances where a third party has you must give such notification within
policy then you need to refer these to suffered bodily injury or property a certain time limit. Failure to comply
your insurers at the earliest opportunity. damage arising from the possession, with this requirement may prejudice
use, consumption or handling of any coverage under the policy.
goods or products manufactured,
constructed, altered, repaired, TAKING ON EXTRA
serviced, treated, sold, supplied or RESPONSIBILITIES AND
distributed by you. However, this cover LIABILITY UNDER CONTRACTS
is usually afforded in respect of such When entering into a contract where
goods, services or products which are you are asked to assume liability or to
used in conjunction with aircraft. waive your rights you should discuss
Your product liability insurance would this with your brokers and insurers.
normally only respond to damage to Your insurance policy may only offer
third party property which is not your protection for the liabilty arising from
property or within your custody or your normal operations and not that
control. Also, it would not operate to asumed or agreed to voluntarily
cover the cost of repairing or replacing by yourselves.
defective goods or rectifying defective
services which may be subject to a
product warranty (i.e. product recall).

26
ROLE OF LAWYERS
Where a liability claim is legally
complex, or proceedings are initiated
or intimated against an insured,
specialist lawyers will be instructed by
insurers to act on behalf of the insured.

The lawyers will investigate the claim


and protect the interests of the insured
client by defending proceedings and
making sure they are resolved in
an effective fashion, either through
negotiating a settlement or defending
the matter in court.
CLAIMS CONTROL ROLE OF LOSS ADJUSTERS
In order to minimise the risk of
In normal circumstances, the insurers Specialist loss adjusters are appointed
inadvertent admissions or loss of
will retain the right to manage how by insurers to investigate and assess
documentation and information
a claim is handled and resolved in the facts of claims, usually property
needed to facilitate a full legal
consultation with you and your broker. damage claims, and to recommend
assessment of the circumstances of
You must provide all reasonable appropriate repair methods and/or
a claim, early instruction of lawyers is
assistance that the insurer may require appropriate amounts of payments.
preferable. The insurers will provide
to investigate and defend any claims.
They may also monitor repairs as they lawyers with instructions in
Failure to do so may prejudice the
are being carried out and they tend to consultation with the insured client.
coverage under the policy. All costs
have a technical background in
of external loss adjusters and lawyers
aviation engineering.
appointed by insurers will be paid by
insurers as part of your cover.

27
FURTHER
INFORMATION

If you have any questions relating CLAIMS TEAM NOTES


to any of the issues mentioned in the
JERRY FLAXMAN QBE would like to express their thanks
brochure or regarding our insurance
Claims & Business and appreciation to Mark Franklin
products, please contact our products
Development Manager of DLA Piper UK LLP for his major
underwriters or claims adjusters
tel +44 (0)20 7105 5706 contribution to this document. This
listed opposite.
mob +44 (0)7802 807742 brochure has been produced by QBE
DEBRA JOHNSON in conjunction with the international
EMILIO DI SILVIO
Senior Adjuster law firm DLA Piper UK LLP.
Managing Director
tel +44 (0)20 7105 5714 tel +44 (0)20 7105 5711 Where legal rules are mentioned, they
mob +44 (0)7785 257836 mob +44 (0)7788 438394 relate to English law unless otherwise
stated. All references to contractual
UNDERWRITING TEAM MARKO NINKOVIC
relations are to relations between
Senior Adjuster
GRAHAM DALDRY businesses rather than between
tel +44 (0)20 7105 5713
Senior Underwriter businesses and consumers.
mob +44 (0)7795 094307
tel +44 (0)20 7105 5716 QBE and DLA Piper UK LLP make no
mob +44 (0)7720 444219 STUART FARLOW
warranty in relation to the accuracy of
Adjuster
TONY AMBROSE this information. This publication is not
tel +44 (0)20 7105 5728
Underwriter intended to be definitive and should
mob +44 (0)7747 014099
tel +44 (0)20 7105 5339 not be relied on as a substitute for
mob +44 (0)7909 524964 specialist legal advice.
Email QBE and DLA Piper UK LLP will not
MARK SPERRING
firstname.lastname@uk.qbe.com accept any responsibility for actions
Assistant Underwriter
tel +44 (0)20 7105 5727 taken or not taken on the basis of
mob +44 (0)7928 106058 this publication.

28
Aviation Syndicate 5555
Plantation Place
30 Fenchurch Street
London
EC3M 3BD
enquiries@qbe.uk.com
tel +44 (0)20 7105 4000
fax +44 (0)20 7105 4019
www.QBEeurope.com/aviation

Syndicate 5555 is managed by QBE Underwriting Limited, a Lloyd's managing agent. QBE Underwriting Limited is part of QBE
European Operations, a division of the QBE Insurance Group and is authorised and regulated by the Financial Services Authority.
Registered office Plantation Place, 30 Fenchurch Street, London EC3M 3BD. Registered in England and Wales No. 1035198.