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The most significant overhaul of European product liability law in almost 40 years is coming to Ireland, bringing significant implications for Irish non-life insurers. The new regime will apply to all products placed on the market after 9 December 2026.
The EU Product Liability Directive 2024/2985 (the PLD) will repeal Council Directive 85/374/ EEC, which was implemented in Ireland by the Liability for Defective Products Act 1991. The PLD is intended to modernise the existing legal framework to address developing technologies, digital ecosystems and the circular economy. The secondary legislation required to implement the PLD is currently being drafted, and the Government has indicated that the transposition deadline of 9 December 2026 will be adhered to.
In advance of the transposition deadline, domestic Irish non-life insurers or those operating in Ireland with product liability, technology, cyber or casualty risk books should prepare for a shift in exposure and potential uncertainty as the parameters of the PLD are scrutinised by the Irish Courts.
This article summarises the main impacts we anticipate the PLD will have on insurers operating in the Irish market from policy drafting to claims handling. For more general information on the PLD, see our publication here.
An increased demand for cover
The PLD establishes a structured hierarchy of parties who could face liability for a defective product. In moving away from the traditional manufacturer-focused liability, the PLD will provide a cascading liability system which aims to ensure that a claimant always has a recovery option against an EU-based entity.
Extending potential liability to importers, distributors, fulfilment service providers, and online platforms is likely to drive increased demand for product insurance across the Irish market. For example, many Irish businesses in the supply chain may find themselves designated as the ‘default’ liable party for non-EU manufactured products.
This is likely to lead to new categories of policyholders seeking product liability cover, increased limits of indemnity to address expanded liability exposure and potentially increased underwriting scrutiny for businesses acting as importers or fulfilment providers.
While insurers may welcome increased demand for cover, the correlating change to risk exposures will require insurers to reflect on the depth and scope of their product coverage. For example, insurers may need to consider whether their offerings are sufficiently diverse to provide effective cover depending on where the policyholder falls on the liability spectrum or whether their existing products may contain “silent cyber” risks.
Non-tangible ‘product’ cover
One fundamental change under the PLD will be the expansion of the definition of a ‘product’ to include software, AI systems, cybersecurity, computer programmes and digital services. This expansion represents a clear shift away from a tangible‑goods model under the previous regime to one that recognises the role of non-tangible goods, including technologies, in modern society.
Non-life insurers will need to review their policy wording, in particular, their own definition of a ‘product’ to ensure clarity as to whether the policy is intended to cover software-related failures and AI risks. For insurers with large consumer books, careful consideration will be required for everyday technology risks in consumer products, including autonomous functions in vehicles, smart home devices or digital health technologies, which are increasingly prevalent in the Irish consumer market. In relation to non-consumer insurance policies, insurers will need to consider whether the wording of product liability or cyber policies need to be revised to reflect the expanded definition of a ‘product’, for example if new exclusions or limitations need to be introduced to refine the scope of cover or to avoid over-lapping cover under different policies.
In anticipation of these developments, insurers should reassess their underwriting guidelines, policy wording and risk models to ensure they adequately and clearly reflect their position vis-à-vis integrated cyber risks.
Procedural reforms and future considerations
The procedural reforms introduced by the PLD will impact all claims brought under the PLD and will have far-reaching effects beyond insurers. Two of the primary reforms introduced by the PLD include (i) a rebuttable presumption of defectiveness and/or causation in certain circumstances, and (ii) new heads of recoverable damage, including medically recognised psychiatric injury and the destruction or corruption of non‑personal data.
Due to the nature of the reforms under the PLD, which involve the expansion of various definitions such as ‘product’ and revise the hierarchy of liability to ensure an EU-based party can be pursued by a claimant, we anticipate an increase in the volume and size of claims being litigated before the Irish Courts. As a result, insurers should review their claim reserve practises and adjust them accordingly, while also taking into consideration the additional legal defence costs and more claimant-friendly environment emerging under the PLD.
While the current Government has illustrated a reluctance to legislate for third party litigation funding in Ireland, Ireland has introduced a collective redress scheme under the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023.
Key takeaway for insurers
Given that many insurers operate across multiple jurisdictions on a cross-border basis, it is worth noting that while the PLD will harmonise product liability laws across the EU, this may in turn influence where claimants choose to litigate. While this remains to be seen in practice, it is a dynamic that should be kept in mind as the regime beds in.
It is also important to recognise the growing divergence between the EU and the UK following the implementation of the PLD. Whilst the UK is in the process of restructuring the Consumer Protection Act 1987 (the CPA), which governs their product liability regime, the suggested reforms do not appear to reflect the pivotal reforms forthcoming under the PLD, which will enhance protection for claimants due to the introduction of a rebuttable presumption of defectiveness and/or causation and the wider scope of parties against whom a claim can be brought against. A practical point which insurers may consider in this regard is the adequacy of the jurisdiction clauses in their policies. Insurers operating internationally should closely monitor emerging differences and the evolving framework in both the EU and the UK, and stakeholders should be aware of these distinctions when assessing risk, coverage and claims strategies.
While the PLD represents a major shift in product liability regulation; for insurers, the PLD creates both commercial opportunities as well as potential challenges. Insurers should anticipate and prepare for increased enquiries from Irish SMEs, e‑commerce intermediaries and businesses operating through online marketplaces who may now require cover as a result of the expanded definition of a ‘product’. Similarly, the reframing of damage and extension of potential defendants and products will likely reshape underwriting strategies, policy wording, exclusions, reserve figures and claims management.
With the PLD coming into force on 9 December 2026, now is the time to begin policy wording reviews and underwriting strategy adjustments to ensure readiness for a more complex, and potentially more litigious, product liability landscape in 2027.
For further information on the implications of the PLD for your organisation, please contact Sarah Murphy (Partner), Ciarán Ó Conluain (Partner), Stephen D’Ardis (Partner), Nadia Woods (Senior Associate), Sarah-Jane McCusker (Solicitor), or your usual contact in the ALG Disputes & Investigation or Insurance team.
Date published: 15 May 2026
