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이경선 ( Yi Kyungsun ) 연세대학교 법학연구원 글로벌비즈니스와 법센터 2019 연세 글로벌 비즈니스 법학연구 Vol.11 No.2
The disputes arising between the injured and responsible parties over legal remedies for damages caused by product defects can be collectively called product defect disputes. Any participant in the product supply chain may be a party to a product defect dispute, and the insurers bear the damages of the parties, and then exercise the insureds’ rights in subrogation against the other responsible party. Depending on the type of damages and the pattern of disputes, product defect disputes can be divided into quality assurance disputes, disputes over extended damages, recall disputes, and cyber risk related disputes. The insurances related thereto include quality assurance insurance, extented warranty insurance, product liability insurance, recall insurance, and cyber risk insurance. A product liability lawsuit may become an international litigation, which raises the issue of determining international jurisdiction and governing law. Even if a Korean company is complained against in a foreign court the foreign court may recognize its jurisdiction, and the insurer may be obliged to perform the duty to defend these international cases. A manufacturer's liability shall be governed by the law of the place of occurrence, and the application of insurance contracts concluded in Korea shall be governed by the law of Korea. A manufacturer's product liability insurer may bear the duty to defend the vendors or secondary manufacturers under the additional insured clause and the clause on insured contracts. Operating losses incurred solely due to defects in the product are not subject to the Product Liability Act, but may be covered by certain insurance policy. The current Product Liability Act is unlikely to be directly applicable to disputes over damages arose from cyber risk of IoT products.
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