Product liability coverage protects businesses that make, distribute, or sell products. It offers financial protection if a product sold by a company harms a consumer. This insurance covers legal fees, court costs, and settlements resulting from a product liability claim.
Products and services often do not meet customer expectations. This can be due to unclear marketing messages, substandard work, inadequate labeling, or manufacturing and design defects. These issues can result in product liability claims.
Product liability insurance is crucial for businesses that create, distribute, or sell products. Even when companies take safety measures, accidents can still occur and consumers may take legal action. This coverage serves as a safety net, preventing financial harm to the company.
Product liability insurance is vital for businesses, as it offers financial protection and risk management services to minimize liability risks.
Product liability insurance protects your business in case customers file lawsuits claiming injury or damage caused by your product or service. This policy helps mitigate costs of litigation for your company and covers affected customers.
Product liability insurance can help cover legal fees and medical costs in the event of bodily injury or property damage claims. The costs of defending against such claims can be catastrophic for small businesses.
Product liability insurance benefits companies in various industries, but it is especially advantageous for the following sectors:
Manufacturers are legally responsible for their products from the start.
B2B operations face product liability risk.
When companies make and sell their products, they run the risk of that product falling short somehow.
Check your policy documents to see what your product liability insurance covers. Some situations are usually covered.
A mistake in production causes a group of beauty products to damage customers’ skin.
The bike frame you designed has a flaw that can make the rider fall over the handlebars.
Your supplement needs better warning labels for customers, even though it’s not dangerous.
Intellectual property insurance protects against the following:
Here are some claim examples that illustrate what Property Insurance covers:
A cyclist using a fitness tracker and GPS is told to turn and is hit by a car, causing serious harm. They sue the device maker for a faulty product. The company shares responsibility for physical harm to customers in the supply chain, even if they didn’t produce the product.
A drone company was responsible for repairing damage to a house after one of their drones hit a power line during maintenance. The drones are used to quickly transport organs between hospitals.
A consumer was shocked while using a new exercise machine, resulting in burns and other injuries. They went to the hospital and incurred significant medical expenses, including emergency room fees, consultations, tests, and medication. They may need ongoing medical treatment like physical therapy or follow-up appointments, which can increase costs.
Product liability claims can vary greatly, from harm caused by beauty products or inadequate warnings to allergic reactions from defective items. Sometimes companies are surprised to be held accountable for such claims, while other times unfounded cases are brought against them. Product liability insurance typically does not cover employee injuries, for which workers’ compensation is generally utilized, among other conditions.
Product liability insurance cost varies based on factors like location, claims history, and policy limits. Carriers also consider other factors when determining premiums.
Product liability insurance cost depends on company size, stage, and other factors.
To manage product liability insurance, it’s important to know your risks. Lawsuits can happen even without grounds, so it’s essential to understand legal requirements and protect your assets.
Make sure to know other policies related to product liability like general liability insurance and product recall insurance. Also, understand the position of your operations in the supply chain to anticipate any future liability.
Product liability insurance helps small businesses improve their products and processes. Insurers offer risk management services to help identify potential hazards and minimize risk, reducing the chance of facing a liability claim.
Shoot us your email and we’ll kick off a conversation to help get you a quote on the best coverage for your brand.