Definition - What does Express Warranty mean?
An express warranty is a verbal or written statement that assures the buyer that the merchandise sold meets acceptable levels of function, reliability and quality. It is usually valid for a specified time span and often indicates that the manufacturer will cover the cost of repair or replacement of the product if it does not meet certain standards. In terms of insurance, an express warranty acts like a policy that covers defects or damages to an asset.
Insuranceopedia explains Express Warranty
An express warranty might be written on the product label, indicating that the manufacturer will repair or replace the product in case of a defect in workmanship or materials. Alternatively, it can also refer to an advertisement, sign, or oral description of a product that the buyer relies on.
For example, a customer walks into a home improvement store and asks the salesperson for anti-acid floor tiles for use in a commercial kitchen. The salesperson instead sells the customer ceramic tiles and guarantees they are anti-acid. Soon after, the customer realizes that they are not anti-acid tiles. In this case, the customer only purchased the tiles because the salesperson verbally guaranteed that they were anti-acid, which would constitute an express warranty; therefore, the buyer would have the right to receive a full refund or replacement.