Today, “risk” is just part of being in business, but you don’t want to be foolish when selecting what types of products you sell. Today we all face areas of liability so you need to be able to sleep at night and know that you are covered from those risks.
More than likely if you or a manufacturer sell a product, you could have shopped for business product insurance in the past. You may have even come across news of consumer safety issues based on product recalls.
These type of issues can take down even a strong company. There are many benefits of this type of insurance coverage however, it is not a type of insurance that is needed by everyone.
First, to give an idea of exactly what kind of insurance this is, product liability insurance is an insurance policy that covers policyholders in the event that a lawsuit is started as a result of the insured’s product or products.
What this means is that the insured is actually someone who has created some kind of product or possibly many products.
Product Liability Insurance will actually protect the insured if someone does make a claim that their product has either physically or mentally harmed them. Engineering, designing, manufacturing and distributing is a very exciting adventure. Many people dream all of their lives about different products that would be great for the entire world to use.
Many of these people take their dream a step further and actually turn those magnificent ideas into real tangible products. However, if there is some kind of flaw in the product that potentially hurts someone or even poses a risk to harm someone then your lifelong dream may actually turn into a nightmare without the right type of liability insurance coverage.
Now if you are someone who qualifies for product liability coverage, you may be wondering what does this type of insurance policy actually cover. The way this type of coverage is designed is that it will protect the business against losses even if the loss is a result of negligence, or if the policyholder is liable for damage, injury or loss to someone else’s property.
Therefore, this type of product liability policy covers bodily injury and property damage and even claims that arise.
The bodily injury portion of the policy may pay for the affected person or firm for the cost of medical care, loss of service, and restitution in the event that death occurs.
The property damage section of the policy will pay for the value of physical damage to a property in the event that someone’s property was greatly damaged as a result of using your product. With this policy covering so much you may be assuming that this type of insurance is very expensive.
The good news is that there are low-cost liability insurance policies available for product manufacturers and resellers to cover your product business and inventions from recall liability.
For prices on product liability coverage, you should call an insurance agent for a product insurance quote.
A great resource to check out regarding product safety for product manufacturing type business is the U.S. Consumer Product Safety Commission website.
What Kind of Needs Are Covered by a Insurance Policy for Product Liability?
A Products Liability Insurance Policy is a specialized type of small business insurance coverage that protects business owners from any damages caused to customers through the process of using such a product after purchase.
Product liability is an issue that cuts across almost all kinds of businesses; therefore, they all need to be properly covered by a product liability insurance policy.
This insurance coverage provides protection for manufacturers, importers, wholesalers, retailers, suppliers as well as repairers of manufactured products against product liabilities.
If your business involves any of the ones mentioned
above, you will have to make sure it is covered by this
product liability insurance coverage policy.
As a business owner, you have the responsibility to ensure that whatever product, you manufacture or sell, is of very good quality at all times. This is because any damage to customers resulting from the use of such a product may count against you.
Therefore, if you are responsible of sells, repairs or replacement of manufactured products or parts, you should be careful with what you buy for sale and ensure that all repairs or replacements are perfectly done so that you do not have to be held responsible for product liabilities.
Three Reasons You Could Face Judgments in Product Liability Cases
As a business owner, and especially as a manufacturer, there are three typical scenarios in which you might be facing a judgment arising from product liability. These scenarios can each result in a claim that would require strict product liability coverage to protect the business.
The first is a human error during the manufacturing process. This could include a single part or component of the product being defective or the omission of a crucial part of the product. If the party suing you for abnormally damages or injury arising from a defective product can prove that you deviated from specs or standards while creating the product, you could be facing a large claim.
The second scenario is when instructions and/or warnings are left off of the packaging or are not clear enough. A common issue here is that of language translation. When your instructions and warnings are translated into other languages for foreign packaging, do they mean the same thing?
The last scenario that can commonly induce a large products liability claim is simply that your design is flawed. Sometimes there is no human error, no lack of warnings; it is simply an element of the design that is lacking in safety. Often, this is because a manufacturer is too quick to market a product and doesn’t spend enough time in testing.
Since product liability is an issue that affects almost all types of businesses, it is only wise that every business owner ensures that his or her business is well covered by a product liability insurance policy. You will be more at peace knowing that your business is secured, especially from product liability.