Covers the insured's legal liability for damages where a defect in a product they manufactured or sold injures a third party or damages their property. Essential for compliance with the Product Liability Act.
N2N Insurance Brokerage does not represent any single insurer — it independently represents the client as an FSS-registered broker (Reg. No. 2026-012201). We compare the wordings, rates and service of AIG · Chubb · DB · Hyundai · KB · Meritz to propose the cover and price best suited to your risk. Each insurer's full wording is provided at application and binding.
Product Liability Insurance covers the damages liability the insured bears, under the a product they manufactured, sold, supplied or repairedwhere a defect in it injures another person or damages their property — Product Liability Act or under the Civil Act.
Large retailers, global buyers (Vendor Agreements) and export contracts often require a PL certificate as a mandatory condition.
Covers the strict (no-fault) liability under the PL Act in force since 2002, responding to manufacturing, design and labelling defects alike.
Depending on export exposure, overseas PL endorsements for the US, EU, Japan and others can be added.
Beyond damages, defense costs such as legal fees and court expenses are paid within the limit.
Costs of recalling and disposing of defective product can be added by a Product Recall endorsement.
All manufacturing fields — food, electronics, machinery, chemicals, medical devices, auto parts.
Under the PL Act, importers and distributors bear the same liability as manufacturers for defective product.
Large buyers frequently require a certificate of insurance.
| Field | Frozen-food manufacturing |
|---|---|
| Limit | KRW 1bn per occurrence / KRW 2bn aggregate |
| Deductible | KRW 5 million |
| Key endorsements | Recall-cost cover KRW 500m |
| Product | Battery packs (1m units exported per year) |
|---|---|
| Limit | KRW 5bn per occurrence / KRW 10bn aggregate |
| Endorsements | Overseas export extension (US/EU), recall KRW 1bn, Vendor extension |
| Field | Coffee-franchise head office (300 outlets) |
|---|---|
| Limit | KRW 500m per occurrence |
| Key endorsements | Vendor's Liability (outlet extension), recall KRW 200m |
※ The above are illustrative designs; the actual premium and limits vary with the site's risk profile, past loss history and the insurer's assessment. An exact quote is prepared on consultation.
A power bank that had been sold ignited while charging and burned the user's bedding and furniture. After the fire was put out, the user claimed for the loss of household goods, and the PL policy indemnified the third-party property damage caused by the product defect.
The battery of an e-cigarette that had been sold exploded in the user's pocket and burned their leg. The user claimed treatment costs and compensation, and the PL policy indemnified both the damages and the defense costs.
A stone in spaghetti served at a restaurant broke a customer's tooth. The PL policy indemnified treatment, compensation and the dental prosthesis, easing the burden on the restaurant operator.
※ The above generalise industry claims examples; actual outcomes depend on the policy wording and the terms of application.
| Policy period | 1 year (renewable) — Claims-Made or Occurrence basis |
|---|---|
| Payment | Single (annual) payment |
| Insurers | AIG · Chubb · DB · Hyundai · Meritz |
| Channel | Individual consultation with our adviser (+82-10-5755-6465) |
| Turnaround | 3–5 business days standard / 1–2 weeks for large or complex risks |
If the insured event has already occurred at the time the contract is made, the contract is void. However, where the contract is void due to the company's intent or negligence, or where the company knew or could have known of the nullity before acceptance yet did not refund the premium, the company refunds the premium with interest at the policy-loan rate published by the Korea Insurance Development Institute, compounded annually, for the period from the day after payment to the day of refund.
The specific losses not covered (exclusions) are set out in each insurer's policy wording and product description; on this page, see the “Cover” tab(or the “Losses not covered” section) for the main exclusions. For other cover-specific grounds on which claims are not paid, please refer to the policy wording.
The company provides cover, in accordance with the policy, from the time it accepts the application and receives the first premium. Where the company accepts the application after receiving the first premium with it, cover also begins from the time the first premium was received.
The application must be completed by the policyholder, and the policyholder and the insured must sign it by hand. Failure to sign by hand may result in disadvantages regarding the validity of the contract. On an internet cyber-mall, an electronic signature may be used instead.
The policyholder has the right to be given and have explained the information needed about the product they wish to buy.
The insurer and N2N Insurance Brokerage must explain the important matters of the product to ordinary financial consumers.
When applying, the policyholder, the insured or their agent must disclose truthfully the facts they know regarding the questions in the application (including the questionnaire). Otherwise the claim may be declined or the contract cancelled. Where insurance is taken out by telephone or other means of communication, the duty is performed by answering the seller's questions, which are recorded, without a separate written questionnaire, so answers must be given with particular care.
If, after the contract is made, any of the following arises in respect of the subject-matter insured, the policyholder or the insured must notify the company in writing without delay and obtain endorsement on the policy.
The surrender value is the amount paid if the contract is cancelled early. Unlike bank savings, insurance combines risk protection and savings: part of the premium is paid out as claims to other policyholders who suffer accidents, and part covers the insurer's operating expenses, so the surrender value on early cancellation may be less than the premiums paid, or nil.
Under Article 59-4(1) of the Income Tax Act (special tax credit), for protection-type insurance taken out by an employee only, a tax credit of 12% of the premium paid (capped at KRW 1 million per year) is available. Tax matters may change with amendment or repeal of the relevant tax law.
Except as provided by law, the insurer and N2N Insurance Brokerage do not collect, use, inspect or provide personal data related to this contract — for its conclusion, maintenance and claim payment — without the consent of the policyholder, the insured or the beneficiary. However, for those purposes the insurer may, with the consent of the policyholder and the insured and in accordance with law, provide personal data to other insurers and insurance-related bodies.
The above is a summary and excerpt of the policy wording; for grounds on which claims are not paid and other details, please refer to the policy wording and product description.
Based on real dispute patterns — a 5-scenario self-check
Local PL claim requirements are demanding, and a Korean wording alone is insufficient. A territory-extension endorsement or global PL should be considered.
The base PL wording excludes recall costs. Retrieval, notification, disposal and PR costs belong to a separate Product Recall policy.
Risk of a claim that a defect in the customer's finished product originated in your part. Review the contractual liability cap and exclusions in advance.
Convergence products such as IoT, AI and robotics may be subject to compulsory industrial-convergence PL, so check at the certification stage.
Whether you hold HACCP, CE or FDA certification and your QC system are central to underwriting. Consider pairing a sector-specific PL wording (food PL, cosmetics PL).
A defect was found in a product a Korean parts maker had exported to a US buyer, and a class action was filed in a local court. The company held a Korean PL policy, but its territory was limited to Korea, so cover for the US litigation costs and damages was hard to establish. With a territory-extension endorsement or a global PL wording, the loss could have been considered under the policy — the item exporters most commonly miss at the application stage.
Source: (illustrative industry example) · Commercial insurance from the field #forthcoming
Read the full analysis — Korean PL vs global PL wordings (in progress)The wording and structure items decision-makers most often overlook
A base PL wording usually covers only claims within Korea. With high export exposure, consider territory-extension endorsements for the US, EU, Southeast Asia and so on; the extendable scope and extra premium differ by insurer.
PL's base scope is third-party bodily-injury and property damages. Costs of product retrieval, customer notification, disposal and PR crisis response are covered by a separate Product Recall policy, so PL and Recall should be designed as complements.
Heightened liability from an indemnity clause in a B2B supply contract or an SLA breach is usually excluded from PL. This calls for a complementary design via a separate contractual-liability cover or CGL.
The questions decision-makers ask most when considering PL
A Korean PL wording usually covers only claims within Korea. For overseas litigation in the US, EU and elsewhere, a global PL or a territory-extension endorsement is needed separately, and the extendable scope and extra premium differ by insurer.
A base PL wording usually excludes recall costs. Product retrieval, customer notification, disposal/reprocessing and PR crisis response are covered by a separate Product Recall policy, and PL and Product Recall are usually designed as complements.
Products & Completed Operations covers incidents arising after delivery of the product or completion of the work. It is a complementary area covering risk beyond where ordinary PL ends, and is especially important in EPC, plant and export manufacturing.
A business that has obtained new-product conformity certification under the Industrial Convergence Promotion Act must take it out. Convergence products such as IoT, AI and robotics are the main targets, and failure to insure can affect the certification's validity, so confirm at the certification stage.
Export exposure and territory-extension scope, past claims history, whether a QC system is in place, and whether you hold HACCP, CE or FDA certification are the core underwriting items. The outcome determines the premium, whether territory can be extended, and the exclusions.
A PL wording's base scope is third-party bodily-injury and property damages. Heightened liability from an indemnity clause in a B2B supply contract or an SLA breach is usually excluded from PL, and should be reviewed via a separate contractual-liability cover or CGL.
The insurer calculates it based on field (food, cosmetics, electronics, machinery, etc.), revenue, export exposure, territory-extension scope, past claims history and certifications held. The exact premium and extendable territory are confirmed after underwriting by insurers such as AIG, Chubb, DB, Hyundai, KB and Meritz.
