PRODUCT LIABILITY INSURANCE
Protect your business from claims that a product you made or sold caused bodily injury or property damage to someone else's belongings
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What Is Product Liability Insurance?
Product liability insurance helps protect your business from claims that a product you made or sold caused bodily injury or property damage to someone else’s belongings.
An insurance company may offer this coverage as a standalone policy, but we include it as part of your general liability insurance.
Without product liability coverage, your business could have to pay out of pocket for costly claims related to product defects.
Despite the hard work that small businesses put in to ensure they manufacture high-quality goods, there is still the chance that products could fail to work properly. For example, a children's apparel company could produce clothing that fits improperly and poses a suffocation hazard, or a food service business could bake pastries with an ingredient that triggers a customer's allergic reaction.
There is always the potential for defects that can result in bodily injury or property damage - serious risks neither your business nor customers can afford. That’s why all businesses that sell products should have product liability coverage. Find out what product liability insurance is and how much your small business might need
Why Is Product Liability Insurance for Small Businesses Important?
If your business sells products to customers, you could be at risk of a defect causing injuries or damage to someone else’s property. For example, let’s say a customer buys a power tool that your business manufactures. A defect in the tool ends up injuring the customer, and they sue your business. Your general liability insurance policy’s product liability insurance helps cover:
The customer’s medical costs to treat their injury
Legal fees and costs to defend your business
Settlements or judgments made against your business
Without this coverage, you’d have to pay for these costs out of pocket. Not every business has the resources to cover product liability lawsuits.
Who Needs Product Liability Insurance?
If you sell products to customers or clients, or if you have a supply chain, having product liability insurance can be helpful. Whether it’s small businesses or larger companies, many industries can benefit from this coverage, such as:
Wholesale & distribution businesses
An issue at any stage of production can lead to defects that can put your business at risk of a product liability claim. That’s why it’s important to help protect your business with the right type of insurance.
What Does Product Liability Insurance Cover?
If you have a general liability insurance policy, it can help cover product liability claims related to:
Design defects that existed before the product was made.
Manufacturing defects occur while the product gets made.
Strict liability, which means a customer gets hurt by a manufacturers’ product, even if the business owner isn’t found negligent.
Improper warning, which can happen if a business owner doesn’t give a customer enough warning on the proper use of a product.
Be aware that product liability insurance isn’t the same as product recall insurance. You’d have to buy an endorsement for your business insurance policy to cover product recalls.
HOW TO BUY PRODUCT LIABILITY INSURANCE
Digital Agent will ask you to enter your business details and get covered in less than five minutes.
In most casees you'll receive an instant quote. If your case is complex, it may take a few more days.
GET A QUOTE
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Your personal AI agent is available at your service 24/7, to help you with anything you need.
What’s NOT Covered?
Product liability will not cover injuries to your employees that may have occurred while manufacturing the product. This coverage will also not cover the cost of having to recall your product. The insurance type that can cover recalls is, logically, called product recall insurance.
Furthermore, product liability insurance will not cover damages to your products or lost inventory costs.
How Much Does Product Liability Insurance Cost?
We offer product liability insurance as part of your general liability insurance policy. General liability insurance costs vary between business owners. Some factors that can impact your price include your:
The best way to find your business’ cost is to get a general liability insurance quote. Our specialists can answer your questions and help you get the coverage your business needs.
How does product liability insurance protect common professions?
Manufacturers invest in this coverage for protection when customers sue over a product. It can help pay for lawsuits related to design defects, manufacturing defects, and similar issues.
Retailers and wholesalers
Retailers and wholesalers can be held liable for damages caused by items, even if you weren’t directly responsible for a product defect or other problem. Product liability insurance also helps cover lawsuits over marketing defects, such as improper labels or a lack of warnings.
General contractors and other construction and installation professionals need this policy in case their work is linked to an injury or property damage after it’s completed. For example, if a homeowner sues because their newly installed sink leaks and damages their flooring, this policy would help pay your legal costs.
Product liability insurance is not designed for software, applications, and similar IT and technical products. Tech business owners should opt for an errors and omissions insurance (E&O) policy to protect against coding mistakes and software errors.
Product liability insurance covers lawsuits over physical harm caused by a product. For example, it would provide coverage if your software caused a battery to explode and injure someone.