Zurich in $40million settlement over appliance battery

Zurich General Insurance (China) has disclosed the resolution of a significant liability claim involving a defective remote control exported to the United States, culminating in a US$40 million settlement over a child injury lawsuit. The insurer has confirmed that its policy limit has been fully exhausted following a final compensation payout of RMB 141.28 million.

The claim arose from an incident in July 2022, in which a six-year-old boy suffered severe and permanent gastrointestinal injuries after reportedly swallowing a button battery from an air-conditioning remote control manufactured by the insured party. The child’s family filed a product liability suit in the US, seeking damages of US$125.2 million.

Zurich China was acting as excess loss insurer under the insured’s commercial general liability policy. Upon notification of the claim in April 2023, Zurich worked closely with the policyholder and legal counsel, providing litigation support, coordinating defence strategy, and reviewing liability exposure.

With trial proceedings looming and the risk of a large jury verdict mounting, legal advisers recommended settlement. The parties agreed on a final US$40 million settlement - well below the initial demand but substantial nonetheless. Zurich subsequently confirmed the claim fell within policy terms and facilitated payment after exhaustion of underlying insurance layers.

“Our company promptly confirmed policy liability and completed loss adjustment after the basic layer was exhausted,” Zurich China said in a public disclosure.

The insurer concluded its obligations by June 18, 2025, after completing cumulative payouts totalling over RMB 141 million, effectively exhausting its liability cap.

A rare window into a high-stakes cross-border claim

Product liability lawsuits of this scale are rare disclosures for Chinese insurers, and the case underscores the complex risk profile of exporters operating in litigious jurisdictions like the United States. Zurich China’s decision to reveal the claim details is seen as a bid to demonstrate transparency and mature risk governance, reflecting international norms in casualty lines.

The matter is now closed, and Zurich has completed all indemnity payments and associated costs under the policy.

Zurich Insurance’s footprint in China dates back to 1993, making it the first continental European insurer to establish a representative office in the country. In 2006, it was granted a licence to write general insurance business, and by 2013, Zurich General Insurance (China) Co. Ltd was formally incorporated. The firm now maintains licensed branches in Beijing, Shanghai, and Guangzhou, with a

strategic focus on corporate clients, including exporters and multinational enterprises.

Zurich China serves as a regional hub for complex risk underwriting, particularly in the areas of engineering, product liability, financial lines, and excess-of-loss programmes. As part of Zurich Insurance Group, headquartered in Switzerland, the mainland operation is integrated into Zurich’s broader Asia-Pacific strategy, which has seen digital and technical underwriting growth accelerate in recent years.

While modest in size compared to China’s domestic giants, Zurich China’s niche is in bespoke coverage for globally exposed clients—a position that will only become more relevant as Chinese manufacturers expand into international markets.

China is now the world’s second-largest insurance market, with direct written premiums totalling more than US$696 billion as of 2021. As regulators continue to liberalise the sector and foreign participation deepens, Zurich’s active role in high-profile cross-border claims places it among the leading international players in the region’s evolving commercial lines landscape.

For Zurich, the case represents not just a costly resolution, but also a real-world demonstration of its value proposition for complex, global liability risk - a cornerstone of its China strategy since inception.