Sistership Exclusion Law and Legal Definition

Sistership exclusion is a provision in commercial general liability policies that excludes coverage for damages arising from the withdrawal, inspection, repair, replacement, or loss of use of an insured’s product. Sistership exclusion prevents coverage for any cost, loss or expense due to a defect that is either known or suspected. It is also known as product recall exclusion.

Sistership exclusion is intended to exclude from coverage the cost of preventative or curative action by withdrawal of a product in which a danger is to be apprehended because of a common defect in a sister product. It is not, however, intended to exclude from coverage damages caused by the very product whose failure to perform properly aroused apprehension about the quality of sister products damages arising from the malfunctioning of product where no sister products are involved. [Gulf Mississippi Marine Corp. v. George Engine Co., 697 F.2d 668, 674 (5th Cir. La. 1983)]