What is Products Liability insurance?

Products Liability Insurance is designed to cover the insured’s legal liability for injury or damage sustained by purchasers or users of products.

The type of product, use of product and turnover will often be used to determine the cost of the insurance.

If you simply sell products and are not involved in their manufacture then you may think that Products Liability insurance is not required – this is not the case. If you sell a product that causes injury or damage the original cause may be the manufacturer but you will be the person that faces the initial claim and the associated costs.

 

If your business does any of the following, then this insurance is strongly recommended:

Supplies,
Manufactures,
Sells, or
Processes products

If you are a sub-contract manufacturer of components do you know what the end product is? Many insurance policies will exclude products liability cover for items used in a safety critical role – so ask your customer what your product will be used for.

Demonstrating to your insurer that you have quality control systems will encourage them to reduce your insurance costs.

If you inadvertently supply dangerous or contaminated products you may be faced with the costs of recalling them, replacing them and limiting adverse publicity, in which case Product Recall insurance may be a sensible precaution.

If you design the products that others manufacture you may need Professional Indemnity insurance.

If the product you supply faces a risk of failure to perform its intended task, then you may also require Efficacy Insurance.

 

Every business has different requirements and we can advise what insurance you do, and do not, need
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