Product liability insurance - Third party consequential loss

(James Budgett Sugars Ltd v Norwich Union Insurance [2002] Lloyd’s Rep IR (forthcoming))

By two decisions, AS Screenprint Ltd v British Reserve Insurance Co Ltd [1999] Lloyd’s Rep IR 430 and Rexodan International Ltd v Commercial Union Assurance Co plc [1999] Lloyd’s Rep IR 495 , the English courts have established that a product liability policy is presumed to cover the liability of the assured to a third party for physical damage and economic loss directly flowing from physical damage, but does not extend to indirect consequential loss. The point was again made by Moore-Bick J in James Budgett Sugars Ltd v Norwich Union Insurance [2002] Lloyd’s Rep IR (forthcoming), on wording slightly different to that found in the earlier cases.