Product Liability Insurance

If you sell or manufacture goods, someone could become injured as a result of using your product. Product liability insurance is a type of small business insurance that protects business owners from claims related to the goods they sell. Whether the product is food or beverages, medicine, or other goods, your business is at risk of being sued for injury due to the product use.

It is important for you, as a business owner, to consider the products for sale when purchasing a product liability insurance policy. You can select varying amounts of coverage based on the amount of risk of physical injury inherent in your products. If you sell hats, for example, you have much less risk than if you sell carpentry tools.

Whether you manufacture a good or simply sell it, you could be held liable for an injury. Product liability insurance covers you in either case. The coverage extends to the buyer, user, and any bystanders should the product malfunction or have another kind of defect. If your product is found to have a manufacturing or production flaw or if a defect in the design is found that makes it unsafe, you could be held accountable. In addition, the claim that a company failed to add proper instructions or warning labels can lead to a lawsuit for injury or loss.

Product liability insurance minimizes your risk for the above situations and more. If someone is injured, any medical costs, court fees, attorney fees, compensatory damages, economic damages, and punitive damages are covered to the extent of your policy. As many business owners have learned the hard way, without proper coverage against product liability, you could easily be put out of business due to associated risks. Thus, it is crucial for you to determine your risk and purchase enough product liability insurance for your small business.

Although manufacturers are typically held accountable for defective or dangerous goods, anyone in the chain of commerce may be held liable, including retailers.

In most cases, product liability insurance is part of the general liability policy for small business owners, but you should confirm this with your insurance representative. Also, find out what your coverage entails to determine whether it is adequate for any risks presented by your product(s).

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