Product Liability

Companies selling products or services risk third-party lawsuits for bodily injury or property damage. For instance, a customer can sue for medical costs and other damages from an allergic reaction to your product, as in the famous "Hot Coffee" case involving McDonald's. This policy covers defense fees and settlements for such situations, regardless of the validity of the claims.

What Is Product Liability Insurance?

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.

Protect your business by buying Product Liability Insurance designed specifically for manufacturing, distributing, or selling products.

Reasons to Get Product Liability Insurance

Why You Need Product Liability Insurance Coverage?

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.

What Does Product Liability Insurance Cover?

Check your policy documents to see what your product liability insurance covers. Some situations are usually covered.

Manufacturing Defects

A mistake in production causes a group of beauty products to damage customers’ skin.

Design Defects

The bike frame you designed has a flaw that can make the rider fall over the handlebars.

Inadequate Labeling

Your supplement needs better warning labels for customers, even though it’s not dangerous.

Intellectual property insurance protects against the following:

Product Liability Claim Examples

Here are some claim examples that illustrate what Property Insurance covers:

Bodily Injury

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.

Property Damage

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.

Medical Expenses

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 FAQ

What Does Product Liability Insurance Not Cover?

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.

How Much Does Product Liability Insurance Cost?

Product liability insurance cost varies based on factors like location, claims history, and policy limits. Carriers also consider other factors when determining premiums.

What are the Cost Factors of Product Liability Insurance?

Product liability insurance cost depends on company size, stage, and other factors.

How Can I Manage My Product Liability Insurance Policy and Risks?

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.

Insurance Brokers For Product Liability Insurance

BrandRock is an insurance brokerage that uses data to serve innovative industries. We specialize in creating risk management products for emerging industries and work closely with clients and underwriters for transparency and efficiency. Our team has expertise in providing product liability insurance services and we partner with top carriers to offer tailored programs for public and venture-backed companies. We understand the need for cost-effective solutions while also providing comprehensive coverage.

Bad stuff happens.

Imagine a policy that actually covers it.

Shoot us your email and we’ll kick off a conversation to help get you a quote on the best coverage for your brand.