???????????? ????????????????????????????????????????????????????????? ???????????????????????????????????? (Product Liability Insurance and Product Recall)

1
???????????? ????????????????????????????????????
????????????????????? ????????????????????????????
????????(Product Liability Insurance and Product
Recall)

• ???
• ??????? ?????????????
• ?????????????????????? ?????

2
?????????????????

• ???? ?????????????????????????????????????????????
  ??????????????
• - ?????????????? (?.?.?.)
  ????????????????????????????????????????? (?.
  420)
• - ????????????????????
• ??????????????????????????????????????????????????
  ???????
• - ??????????? Coverage / ?????????
  Exclusions / Limit of Liability/ Limit of
  Territorial Limit/ Jurisdiction
• - Claim Made Basis
• - ???????????????????
  ????????????????????
• - ??????????? Product Recall
• ?????????????????????????????
• ???????

3
??????????????????????.?.?. ?????????? ?
??????????????????? ??????

• ???????????? ( Negligence)
• ???????????? - ??????????
• ??????????? ??? ???. ????????????????????????
• ?????????????????????????????? (Punitive
  Damages)
• ??????????????????????????

• ?.?.?. ???????????
• ???????????? ??????? ??????? ?
• ????????????????????????????????
  ??????????????????????
• ?????????????????????????? (Punitive Damages)
• ??????????????????? ???. ?????????????????????????
  ?

4
????????????????????????????????

• ?????????????????? ??? ???????????????
  ?????
• 1) ??????????????????? ?????????????????
  ?????????????????????????????????????????
  ???????????
• - ???????????????? ???????????
  ??????????? ??????????
• - ?????????????????? ?????? ???????
  ?????? ??? ?????????????????? ?????????
• 2) ??????????????????? ?????????? ?.?.?.
  ?????????????????? ???????????????????????
  ????? (punitive damages )

5
??????????????????????

• ????????????????????
• ??????????????? gt ???????????

??????????/ ??????
6
???????????????????????????????????????? ??????.

• ???????????? gt ????????????? gt
  ????????????????
• ??????????????
• 1 ) ???????????????????????????
• 2 ) ??????????????????????????????????
  ?????????????
• 3 ) ????????????? ??????? ??????????????????????
  ???
• 4) ??????????? ????????????????

7
?????????????

• ?????????
• ????????????????????? ????????????????????????????
  
• ????????????????? ?????????????
  ??????????????????????????
• ????????
• ????????????????????????????? ??????????????????
  ?
• ?????????????????????????????? ?

8
??????????????????????? ??????? ?

• ??????????????????????????????? 3 ????????
• 1) ???????????? ??????????????????????
  ????????????????????
• 2) ?????????????????????????????
  ????????????????????????????????????????????????
  ???????????
• 3) ??????????????? ??????????????????
  ???????????? ????????????????????? ?????????
  ?????????????? ?????????????

9
???????????????????????

• ??????????????? ????????????????? ????
• 1 ) ????????????????? ???????????????????
• 2 ) ???? ??????????????????? ( Peace of Mind)
  ????????????????????????????????
• ??????????? ????
• 1) ????????????????
• 2) ??????????????? ?????????????????? ???
  ?????

10
??????????????????????????????????????????????????
??????????? ( Product Liability Insurance)

• ??????????????????
• ???????? ????????????????????????????
  ????????????????????????? ?????????????
  ?????????????????????????????????????????????????
  ??????????????????????????????????????
  ???????????? (Retroactive Date)
  ??????????????????????????????????????????????????
  ???????????? ( Claim Made Basis)

11

• ???????????????????????????????????
• ??????????????????? ??????? ??????
• ???????????????????????
• ??????????????????????????????????????????????????
  ????????
• ???????????????? ( Limit of Liability)
  ???????????? ????????????????
• ??????????????????? (Jurisdiction) ???????????

12
?????????? ( to pay on behalf)

• ????????????????????? ? ?????????????????????
  ?????? ???????????????????????????????????????????
  ???????? ?????????????????????????????????????????
  ?????
• ???????????????????? ?????????????????????????????
  ????????????? (?. ??? ?. ? ?. ???, ???)

13
???????????????

• ?????????????????????? ( Moral Obligation)
• ?????????????????????????????????
  ??????????????????? ???????????????????? ???????
  ???. ??????????????.?. ?????????????????????????
• - ???????????????????????????????

14
???????????????????

• ?????????????????????????
• ????????????????????????? ( Defective Design)
• ???????????????????? ( Defective Manufacturing)
• ???????????????????? ???????????? ?????????? (
  Defective Marketing)

15
Claim Made Basis VS Occurrence Basis

• Occurrence Basis ??????????????????
  ???????????????????????????????????????
• Claim Made Basis ????????????????????? (Make
  Claim) ???????? ??????????????????????????????? (
  Claim Notification) ?????????????????????????????
  ?????????????????????????????????????????????????
  ???? ?????????????????????????? ( Retroactive
  Date)

16
????????? ????????

• ?????????????????????????? ???????????? ???????
  ????????????????? ????????? ??????????????????????
  ?? ???????????????????????????????????????? ?
• ?????????????????????????????????????
  ??????????????????????????? ??????????? ???????
  ????????????????????????????????????
• ????????????????????????????????? ???????????????
  (Product Recall)

17

• ??????????????????????????????? ( Product
  Recall Insurance )
• ???????? ??????????????? ??????????? ????????
  ??????????????????? ??????????????????
  ????????????????????

18
???????????

• ??????????? (Coverage) ???????????????????? ?????
  ???????????????????? ?????? wordings
  ?????????????????? ??????? technical ???????????
  ????????????????? ????? ?????????????????
• ???????????????? ( Limit of Liability)
  ???????????????????????????????????
• ??????????????????? ( Jurisdiction)
• ?????????????? ( Premium) ????????

19
??????????????????????????????

• ?????????????????????????????? ?????????????
• ?????????????????? (Design Defect)
• ??????? ( Manufacturing Defect )
• ??????? (Defect in Marketing) ????
  ??????????????????????????? ??????? ( Improper
  Instruction) ????????????????????? ( Failure to
  warn) ???????

20
Case Study 1 Defective Design Manufacture
MISSISSIPPI

• Haynes, Estate of v. Bush Hog, Inc, Southeastern
  Forge, Inc. MS, Jackson
• Trial Date 03/2001
• Plaintiff Verdict Total Verdict Award
  12,000,000
• A 38-year-old female died when a blade from a
  bush hog grass cutter, designed by the defendant
  company and manufactured by the co-defendant
  company and being used by a non-party, broke off
  and crashed through the windshield of the
  decedents vehicle and struck her in the neck.
  The plaintiffs estate contended that the
  defendant negligently designed and sold the
  tractor and blade that were involved in this
  accident. It was further contended that the
  co-defendant negligently manufactured the blade
  for the bush hog and that the defendants failed
  to provide a shield to protect the public from
  debris and broken blades. The defendants denied
  liability and the defendant contended that its
  company had been in business for more than 40
  years and it was the first time that an incident
  like this occurred. The decedent was survived by
  her mother and three children.

21
Case Study 2 Defective Manufacture MISSOURI

• Foster, Estate of v. Catalina Industries Inc.
  Grandrich Corp.Docket 198CC2066 MO Incident
  Date 1/1995 Trial Date 04/2000
• Plaintiff Verdict Total Verdict Award
  15,000,000
• A four-year-old male was electrocuted when he
  came in contact with a lamp manufactured and
  distributed by the defendant while in contact
  with a well grounded object. The plaintiff
  contended that the defendants negligently
  manufactured and distributed the lamp with a
  full-line voltage in the frame, causing the
  plaintiffs electrocution. The defendants denied
  liability and each contended that the other was
  negligent.

22
Case Study 3 Defective Manufacture ALASKA

• Talbert v. E ola International Ak, Ancchorage
• Incident Date 06/1995 Trial Date 02/2001
• Compensatory Award 1,300,000 Punitive
  Damages 12,000,000
• Total Verdict Award 13,300,000
• A 34 year old female suffered a stroke when she
  use a weight loss product, manufactured by the
  defendant, over a period of 3 years. The
  plaintiff contended that the defendant
  negligently manufactured and distributed the
  product that it continued to distribute the
  product after it learned of its adverse effect
  through consumer reports and medical journals and
  that it fails to warn consumers of the dangers
  associated with its use. The defendant denies
  liability.

23
(No Transcript)
24
Fast Food/Junk Science

• Are the food service manufacturing industrys
  vulnerable to suits over obesity?
• McDonalds sued in late 2002 over allegations
  that their food makes people fat (DISMISSED)
• Kraft sued earlier this year over trans fats in
  Oreo cookies (DROPPED)

Source Insurance Information Institute
25
2002 Top Ten Verdicts
Value Issue State
28 Billion Tobacco (Product Liability) Florida
2.2 Billion Negligence (Pharmacy Mal) Missouri
270 Million Personal Injury (Burn) Kentucky
225 Million Product Liability (Rollover) Texas
150 Million Tobacco (Product Liability) Oregon
122 Million Product Liab. (Auto Accident) Virginia
97.2 Million Business Fraud California
95.2 Million Med Mal (Birth Injury) New York
91 Million Medical Malpractice New York
80 Million Med Mal (Birth Injury) New York
80 Million Prod. Liab/Personal Inj. (Auto) Missouri
Source LawyersWeekly USA, January 2003.
26
Factors Driving Severity
Why Are Awards Getting Bigger?

• Medical Inflation
• Class Actions / Punitive Damages
• Jury Desensitization to Money/Deep Pockets
  Syndrome
• Sensationalized Media Coverage (e.g., Mold)
• Concern over Corporate ImageCos. Quick to Settle
• Some US Corporations do Really Dumb Things

27
Cost of U.S. Tort System( Billions)
Tort costs consumed 2.0 of GDP annually on
average since 1990, expected to rise to 2.4 of
GDP by 2005!
Per capita tort tax expected to rise to 1,000
by 2005, up from 721 in 2001 Even a modest
reduction in tort costs would be more stimulative
than the 674 billion Bush tax/spending plan
Source Tillinghast-Towers Perrin. 2005
forecasts from Tillinghast.
28
Tort Costs as a of GDP
High tort costs put the U.S. economy at a
significant disadvantage.
1998 (latest available) Source
Tillinghast-Towers Perrin
29
Where the Tort Dollar Goes(2000)

• Tort System is extremely inefficient
• Only 20 of the tort dollar compensates victims
  for economic losses
• At least 58 of every tort dollar never reaches
  the victim

Source Tillinghast-Towers Perrin
30
Insurance is the Biggest Concern of Small
Business Owners
Source National Federation of Independent
Business (June 2003) Insurance Information
Institute
31
IMBALANCE
Social goal
Private Gain

• Social Goal vs. Private Gain

32
?????????????????????

• ?????????????????????????????????
• ??????????????????????????
• ???????????????????? Cosmetics
• ?????????? ???????????
• ???????????

33
Thank You