The testing clause
Balancing act between covered risk and exemption from liability
Many manufacturers take out product liability insurance for their products. As part of their public liability insurance, it covers personal injury, material damage and pecuniary loss or damage incurred by the use of defective products. According to Section 6.2.5. of the Product Liability Conditions (ProdHB), however, such material damage or pecuniary loss or damage should be excluded from insurance cover if it was caused by the insufficiency of the testing of a product.
Objectively, this genuine definition of non-liability extends to cover all products that have been placed on the market, i.e. not only newly developed products, but also products that have been further developed or modified and continue to be placed on the market. In terms of content, the testing must be done at the development stage at which the product is due to be placed on the market.
Another precondition for sufficient testing is the application of systematic and practical test procedures which reflect the current state of technology. The current state of technology depicts the present development status of progressive procedures, set-ups or modes of operation for testing the practical suitability of products for their actual intended purpose. As well as generally acknowledged and tried and tested measures, this also includes test procedures which have proved to be suitable, appropriate and necessary in accordance with the current technical discussion.
Take the example of a tile manufacturer. At all events, the testing specifications in terms of insurance law require that he affix his tiles to a suitable test surface and subsequently, in test procedures which are systematic and conform to the current state of technology, test whether or not the tiles stand up to whatever it is that they can be expected to be exposed to in the indoor or outdoor use actually envisaged. If changes are made following these tests – for example the formulation for the coating is subsequently modified – he must also sufficiently test this last stage of development again with this in mind.
What actual testing corresponds to the current state of technology in a given individual case depends essentially on the product involved and its actual intended purpose. So manufacturers should establish a comprehensive quality management system which implements, documents and archives the sufficient testing of the product via suitable processes in accordance with the currently applicable state of technology early on, in the development and design phase, i.e. before the product is placed on the market. For in a given individual case, the manufacturer can only counter the accusation of insufficient testing by furnishing proof of adequate product tests. It is not enough to argue that sufficient testing was not possible on account of pressure of competition or pressure of time.
The definition of non-liability is subject to a restriction when testing was not carried out in accordance with the current state of technology, but conducted sufficiently in some other way. However, in any given individual case there must also be an investigation and demonstration of whether or not sensible test measures actually existed and were actually applied. For the rest, personal injury is always covered, independent of sufficient testing.