Product Liability Recovery

The litigious society of the past several decades spawned an escalation of product liability claims against corporate America and future decades don't appear likely to escape the trend. Businesses facing product liability claims will often find that coverage is available under their current and historical corporate general liability insurance package. However, plotting recourse against current, or historical, policies is a complex and sometimes risky task.

The DRM process of complex claim settlement is ideally suited for product liability claim investigation, construction and negotiation. DRM's process begins by assembling an experienced claim settlement consulting team that is specifically tailored to meet our client's unique challenges. Relying on DRM's proven archaeological process we can efficiently locate old and lost policy information and reconstruct our client's risk transfer genealogy.

Many product liability claims are covered under products hazard and completed operations provisions of standard commercial liability policies. Claims arising out of business operations on insured premises are often covered under standard premises/operations hazard provisions. Some companies have also purchased special product liability policies or special endorsements that may include product recall, malicious product tampering and accidental contamination coverage.

The product hazard provisions generally apply when a product caused damages or injury to a third person. A "product" is broadly defined under the standard products hazard provision. Claims arising from product use, product defect, misrepresentation or breach of warranty are typically covered regardless of the theory of liability or causation applied. However, products hazard provisions must always be read in conjunction with any exclusions and limitations that may be present. Thus, expert guidance is helpful for interpreting the scope of coverage and its application to the facts.

Completed operations provisions govern liability for bodily injury and property damage to third parties arising from business operations away from the insured premises. This coverage may apply to businesses that perform contracts or provide services at premises other than their own. It expressly includes damages resulting from representations or warranties as to the completed operations. However, liability for professional services is generally excluded. Expert assistance is useful for determining whether this coverage applies in a certain case.

Careful consideration must be given to the type of claim that will ultimately be developed and how it relates to the applicable current or historical insurance policies. DRM's extensive experience in policy language interpretation and successful history of complex claim settlement play an important role in the proper application of coverage. For more traditional product related claims, DRM is able to optimally allocate the claim to the most appropriate policy coverage parts so as to maximize the claim value. For more obscure product claims, the DRM team is proficient in analyzing historical insurance policy language and applying proven theorems of coverage to the claim.

A crucial, and sometimes risky, task in the claim recovery process is the quantification of historical damages, current costs and future risks. The DRM process provides an exceptional template by which all relevant factors affecting the claim disposition can be summarized and correlated to develop an accurate matrix of claim quantification. The DRM approach is built upon an essential risk exposure modeling process that both (1) parallels the analytical process employed by all major property/casualty insurers and (2) provides a professional due diligence and evaluation tool for policyholders.

The proprietary DRM computer modeling program ( Focus ) levels the playing field for negotiations with insurance carriers. Insurance companies have long relied on computer based risk modeling and allocation programs to develop desired settlement criteria in the product liability context. DRM's Focus replicates the insurer's computer analysis and provides a three-tiered probability structure for potential allocation and settlement of product liability claims.

Dispute Resolution Management, Inc. has a successful history of handling product liability and related claims for its clients. The DRM process of settlement has proven flexible to accommodate all of the various claim settlements and collection of involved parties that we have encountered. It is comprehensive in the identification and analysis of alternatives and provides a systematic approach to address the unique set of circumstances presented. Through the DRM Focus Process, Dispute Resolution Management, Inc. is well equipped to help corporations assess, negotiate and settle complex product liability claims.