Casualty in focus: The new EU Product Liability Directive
The EU has fundamentally redefined what counts as a “product” – and with it, so has liability. A new Howden Re whitepaper, The New EU Product Liability Directive (EU) 2024/2853 — what changes, why it matters and what insurers should do, sets out the implications for (re)insurance markets ahead of the December 2026 deadline.
The whitepaper highlights that the new EU Product Liability Directive (EU) 2024/2853 (EUPLD 2024) significantly increases where and how claims can arise across modern supply chains. As liability tails and loss types diversify, the directive asks insurers to consider product liability as a technology-governed lifecycle risk, rather than a static manufacturing exposure.
Wolfram Schultz, Head of Casualty Reinsurance for Continental Europe, Howden Re, said: “EUPLD 2024 represents a structural shift in product liability. As exposure extends across digital lifecycles and interconnected supply chains, insurers need to reassess how they underwrite, manage and aggregate risk. The directive also strengthens claimants’ ability to bring claims, challenging traditional assumptions around causation and control.”
EUPLD 2024, which is enforceable from 9 December 2026, extends strict liability to software, AI-enabled systems, digital manufacturing files and post-market updates, effectively redefining liability. The directive strengthens claimants’ procedural position, expanding the scope of compensable damage and defendants across modern supply chains. As a result, claimants will be better equipped, and portfolios will face new exposure.
Key implications for (re)insurance markets
EUPLD 2024 addresses the legal uncertainty and claims complexity associated with technological developments, circular economy models and global supply chains.
Six structural changes drive this shift:
- Expansion into software, AI and digital manufacturing files
- Reference to psychological injury and non-professional data corruption, removing financial thresholds and caps for injury
- A broadened range of potential defendants
- Structurally easier litigation for claimants through disclosure and evidentiary presumptions
- Expanded product defectiveness assessments
- An extended expiry period for latent injuries
Wolfram added: “Liability doesn't end when a product leaves the factory. An update pushed six months after sale, or a failure to patch a known vulnerability, can now be the basis of a claim. That changes how you underwrite from day one.”
These changes collectively shift product liability from more of a point-in-time assessment to a lifecycle exposure. Liability may now arise from how products evolve post-sale, including updates, cybersecurity vulnerabilities and AI system behaviour.
For (re)insurers, this increases both the likelihood and complexity of claims. Broader damage definitions and stronger claimant tools are expected to drive frequency, while longer limitation periods introduce greater uncertainty around reserving.
The directive also expands the range of potential defendants to include importers, distributors, fulfilment providers and, in some cases, online platforms, increasing multi-party claims and allocation complexity across supply chains.
With the enforcement date approaching, the window to act is narrowing. The report sets out what insurers should do now: review risk management and underwriting frameworks, stress-test policy wordings against the expanded damage definitions and build claims protocols capable of handling earlier disclosure requests and longer latent tails. The structural changes are significant enough that those who move first will hold a material advantage.