Product Liability Insurance


China offers a unique and significant commercial insurance opportunity arising from its export business. Based upon data from China Customs, China exported goods worth US$1,428.5 billion which included US$252.3 billion to the United States and US$141.2 billion to the Germany, Netherlands and U.K. comibined during 2008 (Source: www.ChinaCustomsState).

While China has quickly joined the industrialized world in the production and export of a wide range of commodities, its local insurers have lacked the technical insurance skills necessary to protect its commercial liability interests abroad. While they as a whole clearly recognize that commercial liability insurance is essential, especially in the product liability area, their confusion over U.S. and European liability laws creates the most enormous demand on insurance. The challenge for Chinese insurers is to find a way to protect its product liability exposures against the litigious environments of Europe and the United States.

In fact, a lot of insurance companies are interested in products liability. Many of these companies, however, refuse to involve themselves with Chinese imports that generally fall under the insurance term "reverse flow business" (general liability exposures in the Unnited States that have their source from overseas). The reluctance stems from the fact that reverse flow business can be very difficult to underwrite as the risk is far away and difficult to understand. Since most of the underwriting companies do not have facilities in China, developing critical underwriting information becomes next to impossible. Recognizing this as an immediate and long term golden opportunity, and in answering this need and linking the two opportunities together, Bestfi has done two things:

First and foremost, several interested insurers undertake to invest in a comprehensive organization in writing the liability business to protect exports from China. In addition to its experienced underwriting team, they also consult one of the top product liability underwriting managers in China today, a CPCU with over twenty years product liability underwriting experience in the USA and 10 years in China. The combination of local and foreign experience establishes a system and leads the company to the right direction in pursuing a profitable portfolio of product liability insurance business.

The second step is to secure a steady flow of business from a nationwide network. This shall involve identification of potential clients through partnering with brokers and a comprehensive training program to front-line producers. The training program also includes selection of clients and products likely to be desired by the insurer.