DPP Insurance and Liability Considerations

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A New Dimension of Product Liability

Digital Product Passports introduce a new dimension to the already complex landscape of product liability. Under the Ecodesign for Sustainable Products Regulation (ESPR), businesses are required to provide accurate, verifiable information about their products throughout the entire lifecycle. This obligation creates both direct compliance liabilities and broader commercial risks that businesses must understand and manage.

The implications extend beyond simple regulatory fines. Inaccurate DPP data could influence purchasing decisions, affect product safety assessments, or mislead consumers about environmental credentials. Each of these scenarios carries its own liability profile, and traditional insurance products may not provide adequate coverage without careful review and adjustment.

Data Accuracy and Disclosure Obligations

At the heart of DPP liability is the obligation to provide accurate data. The ESPR requires that passport information is truthful, complete, and kept up to date. This is not merely a best-practice aspiration; it is a legal requirement with enforcement mechanisms.

Consider the potential consequences of data inaccuracies:

• Stating that a product contains a certain percentage of recycled content when the actual figure is lower could constitute greenwashing, attracting regulatory penalties and consumer litigation
• Incorrect material composition data could lead to improper recycling or disposal, creating environmental liability
• Inaccurate repair instructions could result in product damage or personal injury, triggering product liability claims
• Failure to disclose the presence of substances of concern could breach chemical safety regulations in addition to the ESPR

The burden of accuracy extends to data provided by supply chain partners. If a supplier provides incorrect information that you include in your DPP, the liability for the passport as published rests with you. This makes supplier data verification a critical risk management activity.

Product Liability in the DPP Context

The relationship between DPPs and product liability law is still evolving, but several risk areas are already apparent. The EU Product Liability Directive, revised in 2024, broadens the definition of defective products and makes it easier for consumers to bring claims. DPP data could become a key source of evidence in such claims.

If a DPP states that a product is suitable for a particular use, and a consumer suffers harm because the product was in fact unsuitable, the DPP data could be used to establish liability. Conversely, a comprehensive and accurate DPP could serve as evidence of due diligence, potentially mitigating liability exposure.

Manufacturers and importers should work closely with their legal teams to ensure that DPP content is reviewed for potential liability implications before publication. This does not mean being evasive or incomplete; rather, it means being precise and accurate in the claims made. For a broader understanding of the regulation itself, see our complete ESPR guide.

Reviewing Your Insurance Coverage

Most businesses carry product liability insurance, professional indemnity insurance, and general commercial insurance. However, these policies were designed before Digital Product Passports existed, and their coverage of DPP-related risks may be ambiguous or inadequate.

Key areas to review with your insurance broker include:

• Whether your product liability policy covers claims arising from inaccurate or incomplete DPP data
• Whether your professional indemnity insurance covers errors in data provided to DPP platforms
• Whether your cyber insurance policy covers data breaches involving DPP information
• Whether regulatory investigation costs are covered under existing policies
• Whether your directors and officers insurance adequately covers DPP governance failures

In many cases, businesses will need to negotiate policy extensions or additional coverage to address DPP-specific risks. The insurance market is still developing products tailored to this area, so early engagement with specialist brokers is advisable.

Supply Chain Liability and Contractual Protections

Given that much of the data in a Digital Product Passport originates from supply chain partners, apportioning liability for data accuracy is a critical contractual consideration.

Update your supplier agreements to include specific provisions covering DPP data obligations. These should address the accuracy and completeness of data provided, the timeliness of updates when product specifications change, indemnification for losses arising from supplier-provided inaccuracies, and the right to audit supplier data as part of your quality assurance processes.

Consider also requiring key suppliers to maintain their own insurance coverage for DPP data accuracy. This creates a layered risk management approach where liability is shared across the supply chain in proportion to each party's contribution to the passport data.

The practical challenge is that many suppliers, particularly smaller ones, may resist these contractual terms. A collaborative approach that provides support and reasonable timescales is more likely to succeed than a purely adversarial one. Our guide on preparing for the ESPR discusses supplier engagement strategies in detail.

Greenwashing Risk and Regulatory Enforcement

DPPs create both an opportunity and a risk when it comes to environmental claims. On one hand, they provide a structured, verifiable way to communicate genuine sustainability credentials. On the other, they create a permanent, searchable record that regulators and consumer groups can scrutinise.

The Empowering Consumers for the Green Transition Directive (EU) 2024/825, which applies from 27 September 2026 alongside the ESPR, requires that environmental claims are substantiated by robust evidence (the separate Green Claims Directive proposal was never adopted). DPP data will inevitably be used as a benchmark against which marketing claims are tested. Any inconsistency between what your DPP says and what your marketing materials claim could trigger enforcement action.

Mitigate this risk by establishing a clear governance process that ensures alignment between DPP data and all external communications. Marketing teams should not make claims that go beyond what the passport data supports, and any changes to passport data should trigger a review of related marketing materials.

Data Protection and Privacy Considerations

While DPPs are primarily about product data rather than personal data, there are scenarios where the two intersect. For example, if a DPP tracks product ownership for warranty or recall purposes, it may process personal data subject to the General Data Protection Regulation (GDPR).

Ensure that your DPP data architecture includes appropriate privacy safeguards. Minimise the collection of personal data, implement access controls that restrict who can view ownership information, and ensure that your privacy notices accurately describe any personal data processing associated with DPPs.

• Conduct a data protection impact assessment for your DPP programme
• Ensure data subject rights (access, deletion, portability) can be exercised for any personal data within DPPs
• Review data retention policies to ensure DPP data is not held longer than necessary
• Confirm that cross-border data transfers comply with GDPR requirements

Building a Robust Risk Management Framework

Effective management of DPP-related insurance and liability risks requires a structured framework that brings together legal, compliance, insurance, and operational perspectives.

Start with a comprehensive risk register that identifies all DPP-related risks, assesses their likelihood and impact, and assigns ownership. Review this register regularly and update it as the regulatory environment evolves and your DPP programme matures.

Invest in data quality assurance processes that catch errors before they enter the passport. Automated validation, peer review, and periodic audits all contribute to reducing the likelihood of inaccurate data being published. Prevention is always more cost-effective than remediation, and accurate data is the single most effective risk mitigation measure available. For more on the business case for getting this right, see our analysis of DPP benefits.