Damage caused by defects

Product liability policies typically indemnify the assured for loss of, or damage to, property caused by a defect in a product, but not for the cost of making good the defect in the product itself. It is settled law in England that if a defective product is installed into property, the cost of making good the defect is not covered. Further, the mere fact that property incorporates a defective product does not mean that the property itself has been damaged: the whole thing may simply be defective. In Seele Austria GmbH & Co v Tokio Marine Europe Insurance Ltd [2007] EWHC 1411 (Comm), Field J applied these principles to defective windows installed in a building, and further held that liability for damage caused to the building by having to remove the windows was not covered by the wording of the policy itself.