What is a Continuous Exposure Clause and why is it necessary?

  • This is also known as a manifestation clause and it gives a specific single date to a gradually operating loss.
  • Defective products example:
    • If a manufacturer were to produce a batch of defective products which caused people to get ill, it may be difficult to precisely establish when the “injury” actually occurred because the people who became ill from eating the product may have had symptoms for a while before realising what caused their condition
    • There could be dispute as to when the incident causing the injury actually occurred, was it when the product was manufactured, when it was sold, when it was consumed or when the symptoms developed?
    • During this protracted period there many have been various insurers each with different sums insured. This would be a significant problem on a losses-occurring policy but even on a claims-made basis problems could arise.  Clearly it is the date that the claim is instituted that will determine if it falls within the policy period on the claims-made basis but there is still the matter of the Retroactive Date. 
  • The Continuous Exposure Clause defines the date of injury or damage in the absence of any other indisputable evidence.
General Liability