The insufficient safety of the product can lead to personal injuries and damage to property. The producer is obligated to compensate the loss if the product is defective and not safe to an extent which corresponds to a person's legitimate expectations. Product liability contract covers the damages caused to a third party in consequence of using the defective product manufactured, sold or marketed by insured person.
Insured risk is the producer´s liability arising from unlawful damage caused to a third party (injured party) by defective product.