Product Liability Insurance Report

2011 Product Liability Insurance Report

• In 2011, Missouri product liability insurers settled 632 claims with payments totaling $34,682,061. An additional 731 claims were closed without payment.  
• The bulk of payments was comparatively small. Nearly 53 percent of paid claims were closed at amounts less than $2,500; while nearly 77 percent were closed for less than $10,000. 
• At the other end of the scale, two 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, one resulted in permanent injury, while the remainder resulted in property damage. 

• Products resulting in the most paid claims between 2002 and 2011 were:

Product type	Claims paid	Average payment
Asbestos	2,984	$23,607
Appliances	1,894	$2,728
Chemicals	305	$29,472
Contractors	292	$19,890
Putty products	291	$155

• Products associated with the highest average payout for 2011 were:

Product type	Claims paid	Average payment
Manufacturers	12	$1,727,881
Wax/paint/varnish	2	$1,400,380
Insulation (not asbestos)	1	$1,000,000
Farms/ranches	2	$544,748
Engine manufacturing	1	$400,000

• In 2011, total payments were 181 percent of premium, compared to 134 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 $28 million in Missouri 2011. This compares to homeowners premium ($1.5 billion),  private passenger auto ($2.9 billion), and workers’ compensation ($712 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, PO 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.