“Your Product” Exclusion and the CGL

We handle the general liability insurance for a company that manufactures seats for delivery vehicles. The company recently determined that faulty bolts had been used in some seats. The situation was discovered after the seats were sold and delivered to our insured's customers.

My client recalled the seats and repaired them. We know there is no coverage on the CGL form for the recall and repair process. However, my client has asked whether there will be future coverage problems if some of the seats are not returned and repaired, and, in the future, a faulty bolt snaps  which results in an injury.

Illinois Subscriber

There should be no problem with coverage under a standard ISO CGL policy. There is no coverage for the bolts and seats because of the exclusions for damage to your product and/or your work. However, if the seats collapse because of the faulty bolts and bodily injury or property damage to people or items other than the seats occurs, your client's CGL policy should respond.

Keep in mind that coverage probably would flow from the policy in place at the time of any bodily injury or property damage, not from the policy that was in place when the seats were manufactured. Therefore, the client should continue to purchase CGL coverage into the future.

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