Design-defect Exclusion Law and Legal Definition

Design-defect exclusion is a provision in commercial general liability policies that excludes coverage for bodily injury arising from the failure of an insured’s product to perform its intended function because of a defect or deficiency in its design, formula, specifications, instructions, or advertising materials.

Design-defect exclusion does not provide coverage for loss or damage caused by the following:

1.Defective materials;

2.Faulty workmanship ;

3. Error, omission or deficiency in designs, plans or specifications.

However, the design-defect exclusion is not applicable when loss or damage by a covered cause of loss results, and a manufacturer is obliged to pay for such resulting loss or damage.[Harbor Cmtys., LLC v. Landmark Am. Ins. Co., 2008 U.S. Dist. LEXIS 59179 (S.D. Fla. Aug. 4, 2008)