What is Product Liability Insurance?
Designing, manufacturing or distributing a product is an exciting venture. However, in our litigious South Florida environment simply selling a product has become a cause for concern.
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. Typically, damages, legal defense fees and settlement charges are paid by the insuring company when a claim is filed against the business as a result of a product liability suit. This is the policy that will also respond on your behalf if your product is found to have any kind of flawed, unclear or misleading instructions or warnings.
A "product" is anything that is tangibly used, touched or consumed. This type of insurance is recommended for every business that manufacturers a product, or a distributor that puts their label on a product imported into the United States.
Product Liability vs. General Liability Insurance
Though these policies are often purchased together, they are not the same. General liability insurance provides coverage against the most common small business claims. It covers things such as a customer slipping and breaking their leg on your premises. It can also help you pay for personal advertising injuries like slander, and damage to others’ property.
Product Liability is protection for your business against allegations of the product that you manufacture causing bodily injury or property damage. It's especially important certain industries to carry Product Liability such as:
Product Liability FAQ
Product liability helps cover your legal expenses if someone claims that a product you sold, made, or distributed caused an injury or property damage. It can also cover things like:
- Injury caused by your product
- Wrongful death caused by your product
- Illness caused by your product
- Property damage caused by your product
- Court fees
No. it isn't. Product liability insurance does not include recalls. There is an exclusion in most product liability insurance policies that exclude coverage for damages arising from the withdrawal, inspection, repair, replacement or loss of use of an insured's product should it be recalled.
The cost of Product Liability insurance varies greatly depending on the risk categorization of your product, and other things such as:
- Your industry
- Location of your business
- Gross sales
- Claims history
- Coverage limits requested/required
- Quality assurance program in place can help you get a better rate
