Efficacy Exclusions

What is an efficacy exclusion

‘Efficacy - the failure of any product to correctly fulfil its intended use or function and/or meet the level of performance, quality, fitness or durability warranted or represented by the insured’

Product Liability Insurance is not a Manufacturers Guarantee Insurance

The policy is there to cover injury or property damage caused by the product, not if it has failed to deliver the results. Products Liability is not intended to be a "Manufacturers Guarantee"

Insurers generally add this exclusion with occupations that manufacture goods such as:

  • cosmetics manufacturers
  • consulting
  • health product manufacturers
  • medical supplies manufacturers
  • security & telecommunications system installations
  • and even trades such as waterproofing.

It is also a common exclusion for businesses that import products, as Australian insurers see this business type as manufacturers.

Check with your broker to discuss the limitations of a policy that includes an efficacy exclusion

If you are still unsure, talk to our team on 1300 046 787, to discuss your requirement.

Read More: High Court holds insurer cannot rely on an ‘efficacy’ exclusion clause


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