The new EU Product Liability Directive: 5 things Life Science companies need to know

The EU’s original Product Liability Directive (PLD) was adopted in 1985 to establish a common framework for liability arising from defective products.

New technologies, market forces and consumer-focused considerations prompted a revision of the existing legislation, which was adopted by the European Parliament in October 2024 and entered into force on 8 December 2024. This represents the most significant overhaul of EU product liability law in nearly 40 years, modernising the liability framework to address advances in digital technology, artificial intelligence and complex global supply chains.

All EU Member States must transpose the Directive into national law by 9 December 2026. The new rules will apply to products placed on the EU market or put into service from that date.

The new PLD introduces significant changes which may impact life science companies based in or that export to Europe, in particular those that manufacture pharmaceuticals, medical devices and HealthTech products.

• Broader scope: This covers all types of software, including AI systems and certain manufacturing files and related digital services that are necessary for a product to function.
• Liability: Liability may extend beyond manufacturers to importers, distributors, online marketplaces, fulfilment service providers, authorised representatives and substantial modifiers. Businesses with a product that is substantially modified after being placed on the market may be treated as a new product and may assume manufacturer liability where the Directive’s conditions are met.
• Longer liability period: Businesses remain liable for defective products for 10 years after the product is placed on the market or put into service. The standard 10-year period may be extended to 25 years in certain personal injury claims, such as where an injured person has been unable to start proceedings within 10 years due to the latency of personal injury.
• Potential easier access to compensation: The €500 minimum threshold for property damage has been removed, while new disclosure requirements and rebuttable presumption of defectiveness may make claims easier to establish.
• Broader definition of damage: Compensable damage includes medically recognised damage to psychological health and the destruction of data.
   

For brokers advising Life Science and HealthTech clients, the new PLD changes the product liability landscape, expanding the scope of liable parties, removing the €500 minimum threshold for property damage and introducing new disclosure obligations that will directly affect insurance programme design.

In this article, we consider the key provisions and implications of the new PLD that life science businesses and their insurance brokers should be aware of, UK market considerations and key broker actions.

The new PLD has a number of expanded provisions and definitions:

Product. Includes software, AI and AI-enabled products or systems, digital manufacturing files, software updates and digital services integrated into physical products. However, free and open-source software developed or supplied outside of commercial activity is excluded.

Damage. Includes medically recognised psychological damage to mental health, and the destruction or corruption of data.

Economic operators. The list of potentially liable defendants is expanded to include online marketplaces, substantial modifiers, distributors, fulfilment service providers and authorised representatives, as well as any company that significantly refurbishes or modifies a product outside of the manufacturer’s control.

“Long-stop” limitation period. The 10-year long-stop period may be extended to 25 years in certain cases involving latent health damage.

Claim limits. The new PLD removes the €500 minimum threshold for property damage.

These changes significantly broaden the scope for potential product liability claims to be brought against a broader range of life sciences companies, particularly start-ups and those that sell products online.

In several EU countries there are currently limited rules regarding the disclosure of evidence. However, the updated PLD requires defendants to disclose relevant evidence once a claimant presents enough facts to support their case.

Disclosure of evidence must be limited to what is necessary and proportionate, with safeguards for confidential information and trade secrets. Other privileged information will remain subject to national law.

These new disclosure rules are expected to have a significant impact on life science companies. Not only do they create an administrative burden of locating and providing documentation related to a product, but there are also concerns about potential threats to IP.

The revised directive emphasises the importance of safety in determining product defectiveness. Courts will now take into account factors such as product recalls, safety interventions and relevant cybersecurity requirements when assessing a product's safety.

For connected and software-enabled products, liability may also arise from defects that occur after the product is placed on the market, where they result from software or related services within the manufacturer’s control.

For companies in the medical device, pharmaceutical and HealthTech industries, strict compliance with safety regulations will be essential in mitigating liability risks. By maintaining regulatory compliance and product safety processes companies can help to mitigate their liability exposure. However, compliance alone does not eliminate exposure to claims. 

Claimants are required to prove that the product is defective, that they have suffered damage and that the defect caused the damage. However, the new PLD also provides a rebuttable presumption of defect and/or causation, in certain circumstances.

A presumption of defectiveness may arise where:

• A defendant fails to disclose relevant evidence.  
• The claimant demonstrates non-compliance with mandatory product safety requirements.
• The claimant demonstrates that the damage was caused by an obvious malfunction of the product during reasonably foreseeable use.
   

If a defect is proven, causation can be assumed if the resulting damage aligns with the typical consequences of that defect.

In situations involving technical or scientific complexity, the Directive introduces rebuttable presumptions that may ease the claimant’s burden of proof. While the PLD does not define "technical or scientific complexity," national courts will determine it on a case-by-case basis. This provision is expected to impact life science companies, including those in pharmaceuticals, medical devices and technology-driven products.

The new PLD makes it easier for claimants to establish defect or causation in certain circumstances, particularly where products are technically complex. Understanding and addressing these implications is essential to managing potential risks associated with product liability.

The EU’s Representative Actions Directive (RAD), operative since June 2023, enables consumers in the EU to bring collective or group actions arising from alleged infringements of EU law, such as the new PLD. This legislation, combined with the rise of third-party litigation funders in the UK and EU, may increase the potential for group product liability actions. The extent of this impact will depend on the circumstances of each case.

The complexity of life science products and sometimes the lack of clear causality means litigation can be long, complex and expensive. With the new PLD’s introduction of the rebuttable presumption of defect, litigation costs may be further increased. As medical products tend to be used for a longer period of time than products manufactured in other industries, the new PLD’s extension of the “long-stop” limitation period to 25 years will increase the possibility of claims occurring over a longer period of time.

While the UK is not bound by this Directive following Brexit, UK Life Science and HealthTech businesses placing relevant products on the EU market must comply with it and may face the Directive’s rules for relevant products. Separately, the UK’s Product Regulation and Metrology Act (2025) allows updates to the domestic product regulation framework.

 Brokers advising clients with dual UK/EU exposure should consider whether separate or coordinated programme structures are required and ensure that territorial scope clauses in both markets are adequately aligned.

1. Engage clients now: Prepare for the 9 December 2026 implementation date. The new rules will apply to products placed on the EU market or put into service from that date.
2. Review product liability cover: Test policy wordings against expanded scope of the Directive, including software, AI, data and psychological harm.
3. Map the full insured supply chain: Identify potentially uninsured liable parties, including EU importers, authorised representatives and fulfilment providers.
4. Assess limits and aggregates: Consider whether existing limits remain adequate given the removal of the €500 minimum threshold on property damage and the potential for collective actions.
5. Review risk management strategies: Focus on cybersecurity, software updates, regulatory compliance, product recalls and post-market surveillance.
6. Strengthen documentation: Discuss evidence retention and disclosure readiness including how clients protect confidential information and trade secrets.

Specialising in Life Sciences for over 25 years, Chubb offers specialist products, supported by underwriters, risk engineers and claims handlers who are industry specialists. From product liability and clinical trials to professional indemnity, and property insurance to cyber and marine, we have it covered. We can support from early-stage R&D to complex multinational operations.

Explore our Life Sciences and HealthTech proposition here and learn how Chubb Life Sciences expertise can support your business.