Insurance contracts for product liability insurance contain two important exclusions of coverage: the exclusion of products that have been tested insufficiently (testing clause) and the exclusion due to deliberate deviation from written agreements.
In both cases, the insurer will not, for understandable reasons, provide coverage, even if all other policy conditions are fulfilled, which is usually the case.
The insurer does not want to cover development risks that are, for the most part, avoidable or contractual violations such as deviations from statutory provisions or scope statements. Both clauses have a long history, but need a rethink under the conditions of new technologies.The testing clause, in particular, with its reference to the technological “state of the art” begs revision because the term “state of the art” is based on experience and knowledge from the past. It does not comprehensively encompass innovation in, nor provide clarity about the actual safety of, advanced vehicle systems and their electronic components, to give just one example.
Moreover, European legislation, with the new Regulation 2019/2144 of November 27, 2019, applicable to the entire European type approval law as from July 6, 2022, will require precisely that – the safety of any advanced vehicle system and new propulsion system – despite the fact that the necessary statutory requirements are yet to be created. Vehicle manufacturers and their suppliers will bear the burden of proof in this context. This paper will examine these issues.
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New technologies: the testing clause in need of an update