Estimate a product liability coverage need from a credible severe injury or damage scenario, legal defense costs, recall or remediation expense, a contingency allowance, and the deductible. The calculator compares that modeled need with an existing policy limit and highlights a shortfall or surplus. It is a planning aid rather than a legal, actuarial, or insurance recommendation, and actual coverage depends on exclusions, aggregates, jurisdictions, and how defense costs affect the limit.
Base exposure = severe loss + defense cost + recall/remediation expense
Coverage need = base exposure × (1 + contingency %) + deductible
The main result is the modeled amount needed to fund the entered scenario. The gap compares this need with the current limit, without assuming every cost is covered.
Policy definitions, exclusions, waiting periods, deductibles, sublimits, aggregate limits, defense treatment, coinsurance, and jurisdictional rules can materially change coverage. Review the estimate with qualified insurance and legal professionals.
A $1,200,000 severe loss, $300,000 defense cost, and $150,000 remediation cost create a $1,650,000 base exposure. Add 15% contingency and a $25,000 deductible.
Need = $1,650,000 × 1.15 + $25,000 = $1,922,500
Against a $1,000,000 current limit, the modeled shortfall is $922,500.
No. It is a planning estimate based on your scenarios and does not account for every exclusion, endorsement, or legal requirement.
Legal defense can materially increase the total exposure and may be inside or outside the policy limit depending on the wording.
Use a credible severe scenario rather than an unsupported extreme, then test additional scenarios to see how sensitive the gap is.
The calculator subtracts the current limit from the modeled coverage need to show an estimated shortfall or surplus.
Yes. The deductible is added to the cash exposure because it is generally retained rather than paid by the insurer.
| Input | Purpose |
|---|---|
| Severe loss | Credible covered injury or damage scenario |
| Defense | Legal response and defense estimate |
| Remediation | Recall, replacement, or corrective-action expense |
| Contingency | User-selected uncertainty allowance |