Product Liability

Product Liability Information

The Basics of Product Liability Insurance

Product liability insurance protects a company against claims or suits arising from products a company has manufactured or sold. This form of insurance covers a manufacturer’s or seller’s liability for bodily injury or property damage sustained by a third party due to a product’s defect or malfunction. The product may be virtually any type of goods sold to businesses or the public. Examples are machines, food, medicines, and clothing. The injured third party may be a buyer or user of the product or even a bystander.

Why is Product Liability Insurance Important?

Designing, manufacturing or distributing a product is an exciting venture. However, in our complicated world simply selling a product has become a cause for concern, and moreover a product liability exposure. As a manufacturer, distributer or retailer of these products, you may be held responsible if there is an injury that results out of use of a product you sell. Having proper Product Liability coverage will be critical to your operation.

What to Discuss With Your Agent

Before buying Product Liability Insurance, be prepared to discuss the following with your independent insurance agent:

• The type of business you operate, and the specific risks that are present in your industry.
• The types of products you manufacture, distribute or sell.
• The volume of these products that will be distributed into the market.
• What are the products used for, and who will be using them.
• How long are the products intended to last.
• What materials/ingredients are the products made of.
• How clearly defined are the usage instructions, directions and guarantees that are provided with the product.
• The insurance provider’s reputation for customer service and ability to pay claims.
• The responsiveness of the Insurance Agency staff when it comes to generating certificates, processing policy changes, and managing claims.