Cover for the consumer-harm compensation liability of cosmetics makers, importers and distributors from allergy, contact dermatitis, heavy metals, microbial contamination and labelling-law breach. For K-Beauty exports, an extension for the US FDA, EU CPNP and China NMPA is available.
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.
Cover for the consumer-harm compensation liability of cosmetics makers, importers and distributors from allergy, contact dermatitis, heavy metals, microbial contamination and labelling-law breach. For K-Beauty exports, an extension for the US FDA, EU CPNP and China NMPA is available.
Manufacture-distribution, import-distribution.
Partnering with Kolmar, Cosmax.
On Amazon, Tmall, Shopee.
Direct online sales.
| Allergy | Contact dermatitis, eye irritation |
|---|---|
| Heavy metals / microbes | MFDS recall order |
| Labelling law | Drug-misleading ads (outside functional certification) |
| Overseas claims | FDA / EU CPNP / China NMPA |
| Export extension | US, EU, China, Southeast Asia |
|---|---|
| Labelling law | MFDS administrative-disposition costs |
| Recall costs | Recall, notice, disposal |
| Breach / reputation | Online PR response |
| Policy period | 1 year |
|---|---|
| Insurers | DB · Chubb (compared) |
| Limit | Per accident KRW 500m–5bn / aggregate KRW 1bn–20bn |
| Turnaround | 2–4 weeks (including export) |
| Legal basis | Product Liability Act, Cosmetics Act, Fair Labelling and Advertising Act |
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.
Five areas of cosmetics manufacture, import and sale
Domestic cosmetics makers. The core product-defect-liability area.
Korean distributors of overseas brands bear PL as the import responsible-party.
Own-brand cosmetics sold online. An e-commerce-law combination area.
Whitening, anti-wrinkle, UV protection. A high MFDS-approval + safety-responsibility area.
K-Beauty exporters. A by-country PL-law combination area.
A small cosmetics maker received multiple reports of skin trouble after a newly launched functional cream. Under this wording the compensation liability was reviewed, with whether there was a product defect under the Product Liability Act as the key issue. The product's clinical-test data, MFDS-approval data and manufacturing-process records were central to the assessment, and as some consumers had used it knowing in advance of a sensitive constitution, a shared-liability assessment was made. A recall under the Cosmetics Act ran in combination, and the recall cost was handled separately under the recall endorsement. A case showing that cosmetic PL is not simple compensation but a comprehensive area combined with the MFDS-report and recall procedure.
Source: (General industry example)
The wording and structure points decision-makers most often overlook
PL law differs by export market (US strict liability, EU general product safety, China consumer-rights protection). Exporting without a territorial-extension endorsement leaves a cover gap, and the compensation limit differs greatly by market.
Base PL centres on compensation; the cost of the MFDS-report + recall procedure under the Cosmetics Act needs a separate recall endorsement. Recall costs often exceed the compensation, so a combined design is recommended.
The accuracy of the instructions/warning labelling greatly affects the post-accident liability assessment. Whether the sensitive-constitution/allergy warning is adequate and meets the Cosmetics Act labelling duty is central to the exclusion assessment and affects underwriting.
The questions decision-makers ask most when considering cosmetic product liability insurance
It covers the compensation liability a cosmetics maker, importer or seller bears under the Product Liability Act. Compensation for harm from a cosmetic defect — a user's skin trouble, allergy or injury — is the core area, assessed together with breach of the safety-management duty under the Cosmetics Act.
Usually (1) injury such as skin trouble, allergy and contact dermatitis from cosmetic use, (2) after-effects of an allergic reaction, (3) in some wordings, mental-distress compensation, (4) recall costs (endorsement), and (5) legal-defence costs.
The export area needs a separate territorial-extension endorsement. Major export markets — the US, EU, China, Southeast Asia — each apply different PL law (US strict liability, EU general product safety, China consumer-rights protection), so precise design of the cover scope and limit by market is essential.
PL liability arises where a product defect (design, manufacturing or labelling defect) is recognised under the Product Liability Act. User carelessness (ignoring the instructions, ignoring a known sensitivity) can be assessed as shared liability or a ground for exclusion, so the accuracy of the instructions/warning labelling affects both enrolment and the accident assessment.
The base PL wording centres on compensation liability; recall costs are a separate "recall insurance" endorsement or combined-wording area. A cosmetics recall has a set FDS-report + recall procedure under the Cosmetics Act, so combined cover of recall and publicity costs is recommended.
Functional cosmetics (whitening, anti-wrinkle, UV protection) or products with a new ingredient are a different risk-assessment area, so insurer underwriting is conservative. Clinical-test results, MFDS-approval documents and a manufacturing-control system are needed in the process, with acceptance criteria differing by insurer.
The insurer assesses it on the annual turnover, the product category (basic, colour, functional), the export ratio and markets, allergy potential / sensitive-ingredient content, the safety-testing system and past incident history. The exact premium and acceptance are confirmed after underwriting by insurers such as AIG, Chubb, DB, KB, Meritz and Hyundai.
