R. J. "Dick" Christian

Product-liability Insurance

 

In "Going Bare" (October 1985), one is led to believe that warranty insurance is a substitute for product-liability insurance. Warranty insurance, as I understand it, covers defect or damage only to property, whereas product-liability insurance covers both property damage and bodily injury.

While the exposure for property damage can be great, the exposure for bodily injury can be incalculably greater -- there is no limit to the exposure for bodily injury. For this reason, we think that anyone relying on warranty insurance alone has left a serious gap in his or her coverage, which could lead to financial ruin.

The better approach to this problem would be a risk-management analysis in which avoidance, loss control, transfer, and financing techniques are reviewed and implemented where warranted.