What is product guarantee insurance?

Product guarantee insurance is there to cover the costs of dealing with a product that fails to meet the function or specification for which it was manufactured or supplied.

It is similar to product recall insurance, however product recall insurance will only come into effect if the product you manufacture or supply has a fault that is of danger to health. Product guarantee insurance will respond if there is a problem with the product, whether it is dangerous or not.

Product guarantee insurance is often purchased in conjunction with Product Liability insurance, which covers claims for injury or damage caused by the product. Product guarantee insurance extends the cover provided by products liability insurance, as it will cover the manufacturer’s or supplier’s costs to recover and replace the faulty items, even if not hazardous to health.


What type of costs would be covered by product guarantee insurance if a product fails?

Product guarantee is similar to Efficacy insurance, which covers failure of a product or service to perform its function but, as with Products Liability, Efficacy insurance requires injury or damage in order to respond.

The selection of Products Liability, Efficacy, Product Guarantee and Product Recall can be determined by the nature of the product or service you are providing and what it is used for.

Other considerations can be contractual, as many supplier contracts will insist upon some of these insurances being in place.

A final consideration is cost, as Product Guarantee and Product Recall polices generally start at over £5,000 a year, which is normally prohibitive for smaller companies.

We have experience in these insurance policies and can easily advise you on which would be best to help protect your business.