2010 Product Liability Insurance Report

2010 Product Liability Insurance Report

• In 2010, Missouri product liability insurers settled 632 claims with payments totaling $24,743,517. An additional 30,212 claims were closed without payment.    
• The bulk of payments was comparatively small. Nearly 47 percent of paid claims were closed at amounts less than $2,500; while nearly 67 percent were closed for less than $10,000. 
• At the other end of the scale, six claims had payments between $500,000 and $1 million, and six claims had settlements for $1 million or greater. Of the six claims with payments exceeding $1 million, two resulted in death, two resulted in permanent injury, one resulted in minor temporary bodily injury and one resulted in interrupted use of personal property. 
• Products resulting in the most paid claims between 2001 and 2010 were:

Product type	Claims paid	Average payment
Asbestos	3,057	$23,109
Household appliances	1,749	$3,255
Chemicals	309	$29,108
Putty products	291	$155
Contractors	283	$19,166

• Products associated with the highest average payout for 2010 were:

Product type	Claims paid	Average payment
Lead	1	$1,500,000
Public works	3	$506,632
Alarm and detection devices	1	$300,000
Auto, bus, truck parts and supplies	6	$295,192
Fences	1	$283,000

• In 2010, total payments were 134 percent of premium, compared to 64 percent in the prior year.  Large short-term fluctuations are not uncommon in product liability insurance. Due to small volume of business, a few large claims during a year can significantly impact the overall performance of the line.   

• To illustrate the size of this line of insurance, total premium was $25 million in Missouri in 2010. This compares to homeowners premium ($1.4 billion), private passenger auto ($626 million), and workers’ compensation ($680 million).

This report was compiled using closed claim data as reported under Section 374.414 RSMo., and financial data reported on the Missouri Supplement to page 19 of the Annual Statement. The accuracy of this report is therefore dependent upon the accuracy of each company’s submitted data. Future releases of these data may contain revisions.

Any questions about this report should be addressed to the Statistics Section, DIFP, P.O. Box 690, Jefferson City, MO 65102-0690.

*Negative loss ratios can occur when insurers correct past over-reserving.

**To view the most recent product liability data, visit the Supplement Data Report page, select “Product Liability” under the “Property and Casualty Line” menu. Select year desired, then click submit.