qbe aerospace europe product liability management

8/14/2019 QBE Aerospace Europe Product Liability Management

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AEROSPACE PRODUCT

LIABILITY MANAGEMENTSYNDICATE 5555


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FROM JET ENGINES TO STAIRWELLS,

WELL SEE A WAY TO INSURE THEM.

ITS OUR POLICY TO SEE THINGS DIFFERENTLY


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CONTENTS

Introduction 2

Why read this brochure? 4

What is product liability? 6

Product liability based on breach of contract 8

Product liability based on negligence 12

Product liability based on strict liability 14

Litigation overview 16

Reducing your exposure 18

Role of your broker 25

Your insurance policy 26

Further information 28


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We all have legal duties to those

who may be affected by our acts and

omissions. Product liability is nothingmore than an extension of those duties

to those who produce, repair, service

or maintain products, regardless of

whether those products are whole

aircraft, engines, minor parts thereof,

equipment, or other materials such as

manuals, computer materials and so on.

This brochure provides a broad

overview of product liability issues

which may arise in relation to aviation

products and services.

It focuses also on the potential to

reduce product liability exposure by

implementing some straight forwardrisk management measures outlined

in the Reducing your product liability

exposure section.

This may be of benefit to you in a

number of ways: through ensuring

the highest possible reputation for

your products or services, minimisingthe number of potential disputes

between you and your customers,

and minimising the number of claims

which in turn is reflected in the level

of insurance premium payable by you.

Your insurance policy is effectively

your last line of defence when other

risk minimisation measures have not

been successful. Having said that,

there may always be unfortunate

circumstances giving rise to liability

claims which may need to be referredto your insurers, no matter how well

prepared you are.

Where we are your lead insurer, we

will look at all claims sympathetically

and bring experience, professionalism,

imagination and enthusiasm to

resolving claims related issues. We willendeavour to understand your business

and will do our best to enhance it

through the provision of appropriate

support. We emphasize continuity

and value long standing relationships.

A brief outline of the general types

of coverage afforded by a standardproducts liability policy is contained

in the final section of this brochure.

You should always read your policy

carefully to establish the extent of

coverage afforded and if you would liketo discuss any policy issues or raise any

questions you should do this with your

insurance broker in the first instance.

Please note, though, that the legal

and practical material in this brochure

is basic and summary in nature and,

therefore, should be treated as adescription of the tip of the iceberg

only. If you require further information

you are recommended to seek external

advice from specialists.

INTRODUCTION

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For a long time, product liability

was a problem only for those doing

business in the USA. Now, it is

becoming a significant issue in

Europe and elsewhere.

Your organisations exposure to a

product liability lawsuit begins every

time any product you have made,

modified, serviced or repaired leaves

your works. Should an aviation

accident occur, the involvement of

any of those products may lead to

unwanted attention from those

seeking to fix blame.

The legal process may help you, but

sometimes the law can be tough. Did

you know, for example, that when a

claimant wins a product liability lawsuit

against several different defendants,

he is entitled to require just one of

those defendants to pay 100% of the

damages he is awarded, even if that

defendant was held by the court to be

only 10% responsible for the loss?

On other occasions, the legal process

can backfire and blame the poorly

prepared, even if innocent of

wrongdoing. At worst, the penalty

may be being ordered by a court to

pay substantial damages when you

knew, but couldnt prove, that there

was no defect in your products or

workmanship. At best, the penalty may

simply be the considerable burden of

wasted management time and wasted

legal defence costs incurred in proving

innocence rather than staying out of

the courts altogether. In either case,

reputational damage is likely and

impossible to quantify.

WHY READ

THIS BROCHURE?

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The purpose of this brochure is not to

help those guilty of wrongdoing to win

cases. Such cases are best settled earlyand fairly. Instead, its purpose is to

help prevent your organisation from

ever being undeservedly penalised by

the courts in a product liability lawsuit.

Our message is a simple one.

Manufacturers and service providers are

often pulled into, and hurt by, productliability lawsuits because their key

employees do not know enough about

the law and the litigation process to

avoid committing the types of common

errors that lose lawsuits and increase

the amount of damages awarded.

By learning a little about the basicsof product liability law and the judicial

process, it will be possible to

appreciate and identify the steps

which can be taken now to reduce

the exposure of your organisation

to product liability risk.

The closing section of the brochure

refers to your last line of defence, your

product liability insurance policy. Please

refer to this section for the generaltypes of coverage your policy may

provide, bearing in mind you must

always carefully consider your insurance

policy documentation and seek

guidance from your broker, in the first

instance, relating to any policy issues.

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WHAT IS

PRODUCT LIABILITY?

G BREACH OF

CONTRACT/WARRANTY

Liability arises where the workmanship

(or product quality) represents a failure

to comply with the requirements of

contractual promises relating to the

standards of that workmanship (or

product quality).

G

NEGLIGENCE

Liability arises where the workmanship

(or product quality) is defective by

reason of a failure to exercise the

degree of care required by the law.

Whenever you undertake work on a

customers product (or supply/ manufacture

a product or service) the law creates liability.

This will be for physical injury and property

damage/financial loss arising out of your

supply of that product and/or service in

three possible and distinct (and sometimes

overlapping) ways:

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G STRICT LIABILITY

Liability arises where statutory prerequisites

are fulfilled, regardless of whether or not

any breach of contract or act of negligence

was present.

This brochure looks at each of the above

theories of liability in more detail, before

giving an overview of some key aspects

of product liability litigation, and closes with

some guidance on how you can reduce your

product liability exposure.

Every country has its own laws relating

to liability for loss or injury resulting from

the supply of defective products or

workmanship. The legal sections of this

brochure are written from the perspective

of English law. Outside of England, the law

may be different in its detail, but its overall

impact will not be.

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PRODUCT LIABILITY BASED

ON BREACH OF CONTRACT

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A contract comes into existence

whenever one person accepts an order

for the design, manufacture and/orsupply of goods and services in return

for a payment, even where no formal

document is ever signed by the parties.

Product liability will arise whenever the

supplier has breached a promise in the

contract regarding the quality of the

work he undertook; for example,a written promise (known as an

express warranty) in the contract that

workmanship and/or products supplied

will be free from defects.

Even if the contract is silent on quality

issues (i) Sale of Goods legislation

deems that (where the supplier knowsthe product will be used for a particular

purpose) the contract includes a term

that the goods supplied will be of

satisfactory quality and fit for that

purpose; and (ii) Supply of Goods and

Services legislation requires that the

services supplied will be carried out

with reasonable care and skill.

Exclusions of liability can be included

in the contract to deal with deemed

(implied) terms as well as liability issuesgenerally, but it is important to note

that the law imposes limits on their

effectiveness; for example, the law

will not allow a seller to escape liability

for death or injury resulting from his

negligence by inclusion of an exclusion

clause to that effect.

Similarly, where a seller tries to create

immunity from liability for property

damage or financial loss resulting from

his breach of contract and/or negligence

by including a clause in his contracts

to that effect, the law will not enforce

such a clause against the buyer unless

it meets a test of reasonableness.

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Who can sue for product liability based on breach of contract?

Generally, only someone who is a party to the contract, but recent legislation allows third parties deriving certain indirectbenefits from the contract to sue as well.

Is there a time limit for bringing a product liability claim based on breach of contract?

Yes, there are two different time limits.

First, personal injury claims must be lodged in a court within 3 years from the date of the injury or date of knowledge

(or date the claimant should reasonably have become aware) of the breach of contract.

Second, property damage/financial loss/loss of profits claims must be brought within 6 years from the date of the

breach of contract.

Where can we be sued for breach of warranty/contract?

Generally, if the contract parties have chosen a particular jurisdiction for disputes to be heard in, the supplier will

be sued in that jurisdiction.

If no court has been selected, a supplier will not necessarily be sued in the courts of its own country. For example, if a

dispute were to arise from a breach of a contractual obligation which occurred in the USA, a plaintiff may be able to sue

a UK based supplier in that jurisdiction.

What terms does the law automatically incorporate into contracts, even if not discussed by the parties?

The law will automatically include in the contract a term that the product is of a satisfactory quality. This means that it must

meet the standard that a reasonable person would regard as satisfactory, taking into account its description, the price and

any other relevant circumstances. If the supplier knows that the product will be used for a particular purpose, the product

must be reasonably fit for that purpose.

FREQUENTLY ASKED QUESTIONS BASED ON BREACH OF CONTRACT

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What happens if the contract does not give an express warranty for our workmanship to our customer?

It is likely that a warranty will be implied into the contract by law; eg that there is an implied term that the supplier will

carry out the service with reasonable care and skill.

Can we use the contract to exclude warranties automatically imposed by legislation?

Yes, provided the correct contract language is used and the exclusions are reasonable.

Can we use the contract to exclude all our potential liability for breach of contract to our customer?

You can exclude some, but not all of your liability. Excluding liability for death or injury resulting from negligence is

unlawful and therefore unenforceable. The same applies to strict liability imposed by statute. Exclusion of other liabilities

(eg for financial loss and/or damage to aircraft) is permissible, provided a test of reasonableness is satisfied.

What remedies are available for breach of contract?

Usually, damages are the only remedy open to the other party to the contract. Those damages can be for economic loss

(including consequential loss) as well as for physical injury.

Will our standard terms of trading apply if we print them on the back our invoices?

No, unless brought to the attention of the buyer before his order was accepted.

Whose standard terms of trading will apply if both parties send their terms of trading to each other?

Depends on the facts. It may be the last party who submitted his conditions to the other party. It may be neither.

Can we protect ourselves in our contracts from the claims of end users (eg passengers) of the products we work on/supply?

Yes. It is not unusual for a supplier to use the contract with his customer to apportion liability for claims of persons whoare not party to the contract to the customer. This is done by use of a customer indemnity.

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PRODUCT LIABILITY

BASED ON NEGLIGENCE

For a long time, an action based on

breach of contract represented the only

legal avenue open to someone affected

by a defective product/workmanship.

In practice, this meant that the person

responsible for the defective product/

workmanship was immune from legal

liability toward anyone not a signatory

to the contract for the supply of the

goods and services in question.

During the 1930s, however, new

theories of negligence were developed

by the English courts to allow persons

outside the contractual relationship

to sue for damages if they sustained

financial loss or injury as a result of a

defect in a product or workmanship.

As a result, the law now imposes

a legal duty on everyone to take

reasonable care for the safety of

persons who could reasonably be

expected to be affected by their acts

and omissions. The degree of carethat must be exercised is measured

by reference to the care a reasonable

person would exercise in the same

circumstances. If the negligent act is

committed by an employee during

his work, his employer will be liable

for his negligence to third parties.

Exclusions of liability and indemnities

can be included in any contract to deal

with losses resulting from negligence,

but it is important to remember that

the law imposes limits on their

effectiveness; for example, the law

will not allow a seller to escape liability

for death or injury resulting from his

negligence by inclusion of an exclusion

clause to that effect in any contract.

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Can we use the contract to exclude all our potential liability to our customer for negligence?

You can exclude some, but not all of your liability. Excluding liability for death or injury resulting from negligence

is unlawful and therefore unenforceable. Exclusion of other liabilities (eg for financial loss and/or damage to aircraft)

is permissible, provided a test of reasonableness is satisfied.

Is there a time limit for bringing a product liability claim based on negligence?

Yes, there are two different time limits.

First, any claim concerning death or injury must be brought within 3 years from the date of death or injury or from the

date of knowledge (or date the claimant should reasonably have become aware) of the cause of death or injury.

Second, any claim concerning property damage/financial loss must be brought within 6 years of the loss or damage

or within 3 years from the date of knowledge (or reasonable awareness) of the cause of the loss or damage.

Where can we be sued for negligence?

The answer depends on whether there is a contract between the supplier and the claimant. Generally, if there is a contract,

the supplier will be sued in the jurisdiction selected in the contract.

However, if there is no contract, or the contract is silent on jurisdiction, it may be open to the claimant to sue in the country

he is domiciled in, or where the accident took place, or where another implicated party is domiciled.

Are there any defences to a claim in negligence?

Yes, contributory negligence on the part of the claimant and, in limited circumstances, voluntary assumption of the risk by the claimant.

What remedies are available for a claim in negligence?

Damages for direct and reasonably foreseeable losses, with limited recoverability of financial loss arising other than from

physical injury or damage to property.

Who has the burden of proving negligence?

The claimant has the burden of proving negligence on the balance of probabilities, except where the circumstances

of the accident seem incapable of explanation on any grounds other than the defendants negligence, it will be up to

the defendant to prove absence of negligence.

FREQUENTLY ASKED QUESTIONS BASED ON NEGLIGENCE

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Under certain legal rules, liability

will be imposed on the producer of a

defective product irrespective of fault,negligence and the absence of any

breach of contract, if the product is

defective and causes injury.

While such legislation exists for

producers of products in the UK and

EU, none is currently applicable to the

activities of repairers, servicers andmaintenance providers, save to the

extent they act as producers.

The definition of a producer of

a product goes far beyond the

manufacturer of the product and

extends to include anyone who

presents himself as the producer,for instance by putting a logo on

the product.

Perhaps more surprisingly, it also

includes anyone who imports a product

from outside the EU and supplies/sellsit to another in the EU; for example,

suppliers who import spare parts from

a US original equipment manufacturer

for supply to a customer in the UK.

PRODUCT LIABILITY

BASED ON STRICT LIABILITY

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Is there a time limit for bringing a product liability claim based on strict liability rules?

Yes, there are two time limits.

First, any claim must be brought within 3 years running from the day that the claimant became aware or should have become

aware of, the damage, the defect and the identity of the producer.

Second, all claims must be brought within a longstop of 10 years from date of circulation of the product, after which

no claims can be brought, whether or not the claimant had knowledge of the defect.

Can we use the contract to exclude the consequences of strict liability?

No, strict liability cannot be excluded.

Who has the burden of proving that the product is defective on strict liability rules?

The burden of proof lies with the injured person, who is required to prove the defect, the damage and the causal relationship

between the two.

Are there any defences to product liability based on strict liability?

Yes, a producer is allowed several specific defences including:

it did not put the product into circulation

the defect did not exist at the time the product was put into circulation

the defect is due to compliance with certain legal regulations; and

the state of scientific and technical knowledge at the time when the product was put into circulation was not such

as to enable the existence of the defect to be discovered.

What is the extent of a producers liability based on strict liability rules?

Liability under the rules is for death, personal injury and loss of or damage to non-commercial property, but it does not

extend to liability for business loss.

FREQUENTLY ASKED QUESTIONS BASED ON STRICT LIABILITY

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HOW IS A DEFECT PROVED?

Typically, the following will be relevant:

Opinions of experts given to the court

Adverse materials in the defendants

own documentary records

Evidence that the

product/workmanship was not in

full compliance with governmental,

OEM & industry standards

Evidence of other incidents with

similar facts

Findings contained in official

accident investigation reports

Changes made to

products/procedures afterthe accident

Inspection by court of the product

in question

HOW ARE COURT DECISIONS

ABOUT PRODUCT LIABILITY

MADE?

There will be inevitable jurisdictional

variations:

The civil court evidential issues

are decided on the balance of

probabilities (i.e. more than 50/50

in one partys favour rather than the

much tougher beyond reasonable

doubt test used in criminal cases)

In England and Wales and many

other jurisdictions, decisions are made

by judges, but in the US decisions

are usually made by a jury and past

experience shows that juries have a

strong tendency to be generous to

claimants on questions of liability

and the size of damages awards

HOW ARE DAMAGES

CALCULATED?

When a defendant is found liable,

the claimant is entitled to an award

of compensatory damages.

This will include:

Actual losses - compensation

for physical damage to property,

consequential losses (eg past andfuture out of pocket expenses, loss

of income, etc) and, in the case of

breach of contract, pure economic

loss as well (ie loss of profits)

Intangible losses - pain and suffering,

loss of amenity, loss of expectation

of life

Future losses - cost of financial

support of dependants in the case

of death of the claimant

In extreme cases exemplary or

aggravated damages or punitive

damages in the US, for example,

may be awarded (these are generallyinsurable)

LITIGATION OVERVIEW

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Here, the priorities are twofold. First,

reducing the likelihood of product

related incidents and accidentsoccurring. Second, improving your

ability to defend any claims relating

to your products and workmanship.

At all times it is essential that you

maintain good lines of communication

with your customers.

With a view to getting a quickoverview of how well geared your

organisation is to reducing product

liability exposure, please consider

the following questions:

1. DO YOU HAVE A MANAGER

CHARGED WITH SPECIFIC

RESPONSIBILITY TO DEVISEAND IMPLEMENT PROCEDURES

FOR PREVENTING PRODUCT

LIABILITY?

To be effective, a Product Liability

Prevention Manager must report

directly to senior management to

ensure that his concerns andrecommendations are not overlooked

by other managers. He must also be

vested with a high level of authority

and independence. His responsibilities

should embrace many, if not all, of the

items mentioned below.

In large organisations, it might beappropriate to form a multi-disciplinary

Product/Services Review Committee to

assist the Product Liability Prevention

Manager in discharging their functions.

2. DO YOU GIVE ANY

EDUCATION TO KEY PARTS

OF YOUR WORKFORCE ABOUTPRODUCT LIABILITY EXPOSURE

AND THE RISKS OF NOT

FOLLOWING PRESCRIBED

PROCEDURES?

This can be in the form of distribution of

written materials, such as this brochure,

running of training sessions, perhaps

based on specimen case studies

revolving around believable scenarios

involving products of the type regularly

worked upon by your personnel.

Video materials can also be used,

especially if the organisation runs

a full training exercise involving a

mock accident.

An added benefit of training is that

associated question and answer

discussions can reveal problems

previously unknown to management/

the Product Liability Prevention

Manager.

REDUCING YOUR

EXPOSURE

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3. DO YOU CREATE THE KINDS

OF WRITTEN RECORDS THAT

WILL BE USEFUL IN DEFENDINGA PRODUCT LIABILITY LAWSUIT?

It is self evident that reliance on the

human memory to defend product

liability litigation should be minimised

where ever possible. Documentary

records are a daily part of the highly

regulated business of aviation.Once memories have faded and/or

key personnel have left your

organisation, those records may

provide the only contemporaneous

means of proving innocence.

Consideration needs to be given as to

whether the kinds of documents used by

your organisation and the instructionsapplicable to their completion etc can

be made more effective. Hand in hand

with this, attention should be focussed

on procedures relating to documents

which individual personnel may generate

outside of prescribed procedures;

for example, internal memos.

Such documents can have the potential

to raise issues which, in the absence

of further documents closing the loop,

could prove to be circumstantially

embarrassing in the future. For

example, if management decides not

to adopt a change in a non-destructive

testing inspection procedure suggested

by a knowledgeable employee in an

internal memo, but does not generate

a second (contemporaneous) document

explaining why the suggestion was not

accepted, your lawyers may find it

harder to convince a court that the

suggestion was properly considered.

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4. DO YOU HAVE THE RIGHT

PROCEDURES FOR RETAINING

AND RETRIEVING PERTINENT

WRITTEN RECORDS?

Procedures for creating the right kind

of written records will be useless unless

you also have procedures for ensuring

that those records will still exist at trial.

Time limits for starting a product

liability lawsuit after an accident vary

considerably. Add to this the fact that

years may have elapsed between the

start of litigation and the date that the

relevant product left your works means

that it is necessary to keep your

documentary records for very long

periods of time.

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5. ARE YOUR CONTRACTS

SATISFACTORY?

The contract with the buyer represents

the only opportunity for shifting

certain liabilities away from the seller

to the buyer.

The hidden existence of terms implied

into contracts by law combined with

legal limits on the exclusion of liability,means that all contracts for the supply

of goods and services need a set of

interlocking provisions dealing with

warranties, exclusions of liability and

indemnities. Typically, a well structured

and professionally drafted contract for

the sale of goods and services will

replace warranties implied by law with

well defined, but limited, remedies for

the buyer if things go wrong, while

accepting liabilities which cannot be

excluded, and allocating other liabilities

to the buyer through indemnities.

Conversely, a poorly prepared contract

may leave you with liability for

products you have not manufactured,

no protection from the claims of third

parties, such as passengers, as well as

a liability for your own workmanship

which is unconditional in scope and

unlimited in duration.

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6. ARE YOUR PROCEDURES FOR

ENTERING CONTRACTS

SATISFACTORY?

Regardless of how perfectly drafted,

good contractual provisions dealing

with apportionment of liability will be

useless unless properly incorporated

into each contract with a customer.

The same applies to the contracts you

enter into with persons who supplyyou with goods and services.

In practice, it is sometimes the case

that the contract between the

seller/buyer comprises a series of

documents, perhaps intermingled

with things which have been verbally

agreed but without any subsequentwritten note being produced to avoid

differences of recollection in the future.

Standard conditions of trading of one

or both of the parties may be part of

those documents, sometimes without

written acceptance of their inclusion

in the contract.

In such situations, it is often difficult to

identify which terms have and have not

been agreed by the parties as partof the contract. This, in turn, may make

it difficult to identify whether a breach

of contract creating product liability

has occurred and whether the

breaching party has any protection

from liability as a result of other

provisions of the contract.

Therefore, where standard conditions

of trading are used in place of signed

contract documents, it is very

important that sales staff know how

to achieve incorporation and deal with

situations where a buyer is seeking

to impose his own standard (and

conflicting) conditions.

7. DO YOU HAVE THE MEANS

FOR EARLY IDENTIFICATION

OF INCIDENTS/ACCIDENTSINVOLVING YOUR PRODUCTS

OR SERVICES?

The importance of this point is

twofold. First, to help you use in-

service information to improve your

products/services. Second, to give

you early warning of the possibleinvolvement of your products/services

in an incident so that you can be

prepared for the inevitable enquiries

from official accident investigators,

original equipment manufacturers,

regulatory authorities and, in worst

cases, the media as well.

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8. DO YOU HAVE THE ABILITY

TO CONDUCT EARLY AND

EFFECTIVE INTERNALINVESTIGATION OF INCIDENTS

AND ACCIDENTS INVOLVING

PRODUCTS/SERVICES YOU HAVE

SUPPLIED?

Once you have learned of an accident

involving products or services supplied

by you, a means needs to exist toprocess and handle that information

in a constructive manner.

In the case of serious accidents, it may

be appropriate to conduct an internal

investigation for the twin purposes of

identifying safety issues which need to

be addressed by the organisation andcreating a documentary record of

relevant facts and circumstances for

possible use in a future product

liability lawsuit.

As the second purpose relates to the

serious possibility of the organisation

becoming embroiled in product liability

litigation, it may be appropriate to

conduct two separate internal

investigations, thus maximisingconfidentiality through available legal

professional privileges.

9. DO YOU HAVE ANY

PROCEDURES TO DEAL WITH

AN EMERGENCY INVOLVING

PRODUCTS/SERVICES YOU HAVE

SUPPLIED?

If a major incident occurs, things

typically happen very quickly in its

aftermath. This can be a struggle for

the unprepared.

You may find, for example, that you are

receiving unexpected visits from thepolice or Air Accidents Investigation

Branch inspectors (or equivalent

outside the UK) demanding to see

company records and/or interview

employees. Likewise, the media may

focus its spotlight on your organisation

which, in turn, could lead to early

attention from the persons affected

by the accident, whether passengers

and their relatives, persons on the

ground and so on.In each case, you need some advance

understanding of the things you can

and can not and should and should

not be doing. Learning on the job is

difficult. Pre-programmed procedures,

perhaps, accompanied by training are

necessary if these things are going to

be properly managed.

10. DO YOU HAVE PROCEDURES

FOR RETAINING EVIDENCE IN

THE EVENT OF A CLAIM?

In the event of an accident or incident

involving a product which you have

manufactured, supplied or repaired,

the relevant product must be retained

for examination at a later date. If a

product is removed and later returned

to you by regulators or investigators,

you must ensure that procedures are

in place to retain that product in its

current condition.

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ROLE OF

YOUR BROKER

Your insurance broker should be best

placed to provide you with advice on

the nature and extent of insurance

coverage required in order to protect

your operations. Your insurance

broker's advice may not be limited to

the adverse economic consequences

of the risks to which your business is

exposed in its day to day operations.

Under English law, the insurance

broker is the agent of the insured

client and the broker is tasked with

representing the insured clients

interests. However, the insured client is

of course also the client of the insurer

once an insurance policy has been

purchased (as a result of the insurance

brokers advice and representation).

The broker should not only use their

expertise to advise the insured client

how to obtain insurance coverage on

the best possible terms, but also if and

when there is a claim under the policy,

they should assist with the timely

provision of information to the insurer

and also with the expert managementand resolution of claims.

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PRODUCTS LEGAL LIABILITY

INSURANCE

Your last line of defence will be your

products liability insurance policy

Should any circumstances arise that

might result in a claim against your

policy then you need to refer these to

your insurers at the earliest opportunity.

THE POLICY: A BROAD EXAMPLE

OF THE KIND OF COVERAGE A

POLICY MAY PROVIDEA typical product liability insurance

policy will offer you protection in

instances where a third party has

suffered bodily injury or property

damage arising from the possession,

use, consumption or handling of any

goods or products manufactured,constructed, altered, repaired,

serviced, treated, sold, supplied or

distributed by you. However, this cover

is usually afforded in respect of such

goods, services or products which are

used in conjunction with aircraft.

Your product liability insurance wouldnormally only respond to damage to

third party property which is not your

property or within your custody or

control. Also, it would not operate to

cover the cost of repairing or replacing

defective goods or rectifying defective

services which may be subject to a

product warranty (i.e. product recall).

DUTY TO NOTIFY CLAIMS

It is very important that you inform your

insurer of any potential claims as soonas possible after you become aware of

them. Your policy may stipulate that

you must give such notification within

a certain time limit. Failure to comply

with this requirement may prejudice

coverage under the policy.

TAKING ON EXTRA

RESPONSIBILITIES AND

LIABILITY UNDER CONTRACTS

When entering into a contract where

you are asked to assume liability or to

waive your rights you should discuss

this with your brokers and insurers.

Your insurance policy may only offer

protection for the liabilty arising from

your normal operations and not that

asumed or agreed to voluntarily

by yourselves.

YOUR INSURANCE POLICY

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CLAIMS CONTROL

In normal circumstances, the insurers

will retain the right to manage how

a claim is handled and resolved in

consultation with you and your broker.

You must provide all reasonable

assistance that the insurer may require

to investigate and defend any claims.

Failure to do so may prejudice the

coverage under the policy. All costs

of external loss adjusters and lawyers

appointed by insurers will be paid byinsurers as part of your cover.

ROLE OF LOSS ADJUSTERS

Specialist loss adjusters are appointed

by insurers to investigate and assess

the facts of claims, usually property

damage claims, and to recommend

appropriate repair methods and/or

appropriate amounts of payments.

They may also monitor repairs as they

are being carried out and they tend to

have a technical background in

aviation engineering.

ROLE OF LAWYERS

Where a liability claim is legally

complex, or proceedings are initiatedor intimated against an insured,

specialist lawyers will be instructed by

insurers to act on behalf of the insured.

The lawyers will investigate the claim

and protect the interests of the insured

client by defending proceedings and

making sure they are resolved inan effective fashion, either through

negotiating a settlement or defending

the matter in court.

In order to minimise the risk of

inadvertent admissions or loss of

documentation and information

needed to facilitate a full legalassessment of the circumstances of

a claim, early instruction of lawyers is

preferable. The insurers will provide

lawyers with instructions in

consultation with the insured client.

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If you have any questions relating

to any of the issues mentioned in the

brochure or regarding our insurance

products, please contact our products

underwriters or claims adjusters

listed opposite.

EMILIO DI SILVIO

Managing Director

tel +44 (0)20 7105 5714

mob +44 (0)7785 257836

UNDERWRITING TEAM

GRAHAM DALDRY

Senior Underwriter

tel +44 (0)20 7105 5716

mob +44 (0)7720 444219

TONY AMBROSEUnderwriter

tel +44 (0)20 7105 5339

mob +44 (0)7909 524964

MARK SPERRING

Assistant Underwriter

tel +44 (0)20 7105 5727

mob +44 (0)7928 106058

CLAIMS TEAM

JERRY FLAXMAN

Claims & BusinessDevelopment Manager

tel +44 (0)20 7105 5706

mob +44 (0)7802 807742

DEBRA JOHNSON

Senior Adjuster

tel +44 (0)20 7105 5711

mob +44 (0)7788 438394

MARKO NINKOVIC

Senior Adjuster

tel +44 (0)20 7105 5713

mob +44 (0)7795 094307

STUART FARLOW

Adjuster

tel +44 (0)20 7105 5728

mob +44 (0)7747 014099

Email

[email protected]

NOTES

QBE would like to express their thanks

and appreciation to Mark Franklinof DLA Piper UK LLP for his major

contribution to this document. This

brochure has been produced by QBE

in conjunction with the international

law firm DLA Piper UK LLP.

Where legal rules are mentioned, they

relate to English law unless otherwisestated. All references to contractual

relations are to relations between

businesses rather than between

businesses and consumers.

QBE and DLA Piper UK LLP make no

warranty in relation to the accuracy of

this information. This publication is notintended to be definitive and should

not be relied on as a substitute for

specialist legal advice.

QBE and DLA Piper UK LLP will not

accept any responsibility for actions

taken or not taken on the basis of

this publication.

FURTHER

INFORMATION

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Aviation Syndicate 5555

Plantation Place30 Fenchurch Street

LondonEC3M 3BD

[email protected] +44 (0)20 7105 4000fax +44 (0)20 7105 4019

www.QBEeurope.com/aviation

Syndicate 5555 is managed by QBE Underwriting Limited, a Lloyd's managing agent. QBE Underwriting Limited is part of QBEEuropean Operations, a division of the QBE Insurance Group and is authorised and regulated by the Financial Services Authority.

Registered office Plantation Place, 30 Fenchurch Street, London EC3M 3BD. Registered in England and Wales No. 1035198.

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