The sector where a company that manufactures nothing can end up answering as though it had, simply for being unable to say who did.
The exposure that defines the sector is not a store fire: it is liability for a product sold without having made it. Spanish law moves the producer's position onto the supplier where the producer cannot be identified, and gives it three months to name whoever manufactured or supplied the product. Once that window closes, the party who answers is the party who sold.
The second particularity is multiplication. A chain repeats the same risk across dozens of sites, with the public coming and going, high staff turnover, goods moving continuously between platform and store, and a customer database that grows with every loyalty scheme. None of that is especially severe on its own; what weighs is the frequency.
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What defines the risk in this sector is not a store fire, which is what comes to mind first. It is that a company that manufactures nothing can end up answering as though it had.
Article 138(2) of the consolidated Consumer Protection Act puts it bluntly: where the producer cannot be identified, the supplier is deemed to be the producer, unless within three months it tells the injured party who manufactured the product or who supplied it to them. And the same rule applies to an imported product that carries no importer's name, even where the manufacturer's name appears.
The operational consequence is counter-intuitive: a distributor's first line of defence is not the policy, it is the purchase records. If traceability allows the manufacturer to be named inside the window, the legal position changes entirely.
Two rules on amounts are worth holding on to. Article 141 subtracts a €500 deductible from compensation for property damage and caps at €63,106,270.96 the overall liability for death and personal injury from identical products with the same defect.
And article 142 excludes damage to the product itself. That is why the cost of a recall — tracing, withdrawing, replacing — does not travel with product liability cover: it is bought separately. The detail is in the liability page.
The action is time-barred after three years from when the loss was suffered (article 143), but the rights are extinguished after ten from when that specific product was put into circulation (article 144). They run in parallel, and they explain why a claims-made policy needs to look a long way back in this sector.
As a broker registered with the Spanish Directorate-General for Insurance and Pension Funds under reference J0140, New Brokers works on the client's mandate, not on behalf of any insurer.
In distribution the technical work is about drawing three lines that policies treat separately and the business lives together: which product is covered and under whose brand, where goods in transit end and store stock begins, and what happens with a recall. Reviewing that alongside the supply contracts — where who answers to whom is actually agreed — is what stops the gap being found with the batch already out on the street.
The producer's position that the law moves onto the supplier where the manufacturer cannot be identified, with a short window to avoid it.
The cost of tracing, withdrawing and replacing a defective batch, which is distinct from any damage that product causes and is not covered by ordinary liability cover.
Slips, falls and damage to customers and their belongings on the shop floor, car park and common areas: low severity, high frequency.
The loss that shuts a point of sale, where the margin lost during the closure usually exceeds the value of the damaged stock.
Own or subcontracted last-mile delivery, with the goods changing custody several times a day.
Compromise of a database that grows with every purchase, plus point-of-sale payment systems and the online channel.
Shop-floor and warehouse cameras, subject to their own rules on what may be captured and how long it is retained.
Trade credit extended to franchisees and wholesale customers, concentrated in a few significant accounts.
The obligations that, in this sector, trigger the purchase of a specific cover.
| Rule | What it requires |
|---|---|
| Consumer Protection Act (consolidated text), art. 138(2) — View the legislation | Where the producer cannot be identified, the supplier of the product is deemed to be the producer, unless within three months it tells the injured party the identity of the producer or of whoever supplied the product to it. The same rule applies to an imported product that does not state the importer's name, even where the manufacturer's name appears. |
| Consumer Protection Act (consolidated text), art. 141 — View the legislation | It sets two rules on amounts: a deductible of €500 is subtracted from compensation for property damage, and the producer's overall liability for death and personal injury caused by identical products with the same defect is capped at €63,106,270.96. |
| Consumer Protection Act (consolidated text), art. 142 — View the legislation | Damage to the defective product itself is not recoverable under this chapter; the injured party must claim it under general civil and commercial law. This is why the cost of withdrawing and replacing a product does not sit inside product liability cover. |
| Consumer Protection Act (consolidated text), arts. 143 and 144 — View the legislation | The action is time-barred three years after the injured party suffered the loss, provided the responsible party is known. And the rights are extinguished ten years after the specific product causing the damage was put into circulation, unless judicial proceedings began within that period. |
| Organic Act 3/2018, on data protection, art. 22 — View the legislation | It governs processing for video surveillance purposes: images may be captured to protect the safety of people, property and premises, and capture of public thoroughfares is limited to what is strictly necessary for that purpose. It applies to every camera on the shop floor, in the warehouse and in the car park. |
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Go to the client areaAn imported item causes damage and the injured party claims against the distributor, which cannot evidence who made it or who supplied it.
What it means
Article 138(2) turns the supplier into the producer for these purposes, and the window to avoid that is three months. The defence is not in the policy but in the documentary traceability of purchases: without it, the business answers for a product it did not make.
A defect is detected and the product has to be traced, withdrawn and replaced across the whole network before anything happens.
What it means
Article 142 keeps damage to the product itself outside this regime, so the cost of the recall does not travel with product liability cover. It is bought separately, and that is worth deciding before it is needed.
A fire on the premises forces a point of sale to close for several months of reinstatement works.
What it means
What is lost is not just the stock: it is the margin over those months, plus the costs that keep running. The indemnity period has to cover the real timescale of works and reopening, including licensing, which is usually what stretches the closure most.
The central line for the sector: it answers for the product sold and for customer accidents on the premises.
It protects stores, platforms and stock, and responds for the margin lost while a point of sale stays closed.
The customer database, point-of-sale payments and the online channel concentrate both regulatory and interruption risk.
It covers goods between platform and store, which change custody several times a day.
Own last-mile delivery follows its own regime, separate from that of the goods it carries.
It protects collection in the wholesale and franchise channel, where revenue concentrates in a few accounts.
The core is three: general, employer's and product liability, answering for what is sold and for customer accidents; property damage with business interruption for stores, platforms and stock; and cyber risk for the customer database and online channel. On top of that come goods in transit and fleet where delivery is run in-house, and credit and surety where the company sells to wholesalers or franchisees. The scope of each is governed by the specific terms of each policy.
It can end up doing so. Article 138(2) of the consolidated Consumer Protection Act provides that where the producer cannot be identified, the supplier is deemed to be the producer, unless within three months it tells the injured party the identity of the producer or of whoever supplied it. The same rule applies to an imported product that does not state the importer's name. That is why purchase traceability is, in practice, a risk management measure.
Not automatically. Article 142 excludes damage to the defective product itself from this regime, so the cost of tracing, withdrawing and replacing a batch does not travel with product liability cover: it is a specific extension negotiated separately, and it is worth deciding before it is needed rather than during the recall.
Two periods run at once. The action is time-barred three years after the injured party suffered the damage, provided the responsible party is known, under article 143. And article 144 extinguishes the rights ten years after the specific product causing the damage was put into circulation, unless judicial proceedings began within that period.
Article 22 of Organic Act 3/2018 permits processing images for video surveillance purposes to protect the safety of people, property and premises, and limits capture of public thoroughfares to what is strictly necessary for that purpose. It is a compliance duty rather than an insurance one, but systematic non-compliance across a store network becomes a penalty exposure multiplied by the number of sites.
The list of stores and platforms with their sums insured and protections, turnover by product family and the share of own-brand, the detail of imports and their traceability, the split between in-house and subcontracted logistics, the volume and type of customer data, and the liability and property claims history.
Product liability requires you to compensate the damage a defective product causes to third parties. We review its legal scope, product recall and the most exposed sectors.
Read→This information is for guidance only and is not binding. Covers, limits and exclusions are governed in all cases by the specific terms of each policy. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.