Product Liability Insurance

Product Liability Insurance

Product liability insurance provides coverage against claims of bodily injury or property damage caused by products sold or supplied through your business to third parties such as customers, or the public.

The claim can be due to a defect or malfunction of the product and the product may be food, a machine, medicine or virtually any other goods sold to others.

Product liability is sometimes provided on a standalone basis but most commonly it forms part of a commercial general liability policy.

Product liability insurance is recommended for any business that supplies products. Even with products that appear entirely safe, there’s always the potential for something to go wrong – and accidents do happen. Claims of bodily injury or property damage arising from product use (or product failure) can be incredibly expensive, and even if you’re not at fault, you may still incur considerable legal costs while defending yourself.

Product liability insurance safeguards your business by providing cover against such claims, including legal defense costs. So you can confidently go about your work, knowing that your protected if something goes wrong.

There are many different things that can cause a product issue, but three of the common reasons are:

  • Design defect: This issue will be present in a product before it’s even made. It suggests that the design of the product is unsafe or faulty.
  • Manufacturing defect: This issue suggests that something went wrong while the product was being made. Perhaps it was assembled wrong, or missing an important piece.
  • Marketing defect: This type of issue has nothing to do with the product itself, but rather how it was marketed to the customer. Incorrect labelling, incorrect safety warnings (or lack thereof) or insufficient instructions are common marketing defects.

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