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General Business PRODUCTS LIABILITY A product liability provides indemnity to a manufacturer of goods, or the shopkeeper, selling those goods. Or to a repairer, or a tester of food against legal liability at law, incase the products is faulty or has been mishandled before sales. There are however certain limitation imposed by the endorsement wording. Scope Of Cover Legal liability of the insured to pay damages for accidental bodily injury (including illness) accidental damage to property (including consequential loss) occurring anywhere in the world during the currency of the policy caused by the nature or condition of the products or their containers manufactured, sold, supplied, repaired, serviced and tested by the insured in the course of his business. Rating Normally the premium will be based on turnover or other unit, which would provide a suitable measure. The premium would also be related to the degree of hazard of the goods and relationship of the insurer to the public i.e whether as a retailer, wholesaler, or manufacturer. Rating takes into consideration the extension to be granted and vary between 0.5% - 2%. The Rating of General PL Risks (on turnover) With the exception of rating the simple risk such as offices premises, shops or factory premises. The rating of other risk is fraught with difficulty. It depends whether there is work away from the premises of the couple with the hazard of occupation to third parties and also what additional extension may be required to the standard policy. Except for the simple premises risk where flat premiums may be charged, an adjustable premium based on a rate per cent or per mille should be charged or turnover or wages paid as this will take current inflation into account. In addition the indemnity limit also has an influence on the premium. If a premium is charge for an indemnity of N200,000 a lesser premium must be charge for N50, 000 limit. This may be done by a percentage discount from the premium On Turnover/Indemnity
Rating Small/Medium Premises 0.5% - 2% Large Premises 0.2% - 2% Flat premium N160 Estimated turnover N150, 000 Rate N160 x N1000 ------------------- N150, 000 per cent When a flat premium is charged use endorsement TP11. When an adjustable premium charged use endorsement TP12. (Appendix E1) |
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