Estimate the probability-weighted value of a potential product liability insurance claim. Enter a possible loss, the share assumed to be covered, the deductible, the policy limit, and your own annual claim probability. The results separate insurer payment, retained loss, expected insurer payment, and expected total loss. This scenario tool helps compare risk transfer with premium cost, but it cannot determine whether a real claim is covered or how an insurer will adjust it.
Covered loss = loss × covered share
Insurer payment = min(policy limit, max(0, covered loss − deductible))
Expected insurer payment = insurer payment × annual probability
The main result is the annual probability-weighted insurer payment for the scenario. It can be compared with premium, but it is not a forecast of an actual settlement.
Coverage and payment depend on policy wording and claim facts. This simplified estimate does not model defense costs, aggregate limits, multiple claims, sublimits, taxes, or claim-adjustment timing.
A $250,000 loss is assumed 80% covered, with a $5,000 deductible, a $1,000,000 limit, and a 6% annual probability.
Covered loss = $250,000 × 80% = $200,000
Payment if claimed = $200,000 − $5,000 = $195,000
Expected payment = $195,000 × 6% = $11,700
The retained loss if the event occurs is $55,000, while expected total loss is $15,000.
No. It is a probability-weighted planning estimate, not a prediction or guarantee of a payment.
Covered loss above the limit remains uninsured, so the calculator caps the insurer-paid portion at the limit.
This calculator uses a common simplified structure. Actual policies may apply deductibles and defense costs differently, so verify the wording.
Yes. Use the covered share input to reflect the portion of the loss assumed to qualify before the deductible and limit.
Include them only when they are relevant to your scenario and handled consistently with the policy terms you are evaluating.
| Variable | Role |
|---|---|
| Loss | Total modeled financial harm |
| Covered share | Portion assumed eligible before deductible |
| Deductible | Modeled retained amount |
| Limit | Maximum modeled insurer payment |
| Probability | User-supplied annual scenario chance |