A Look at How Product Liability Coverage Works and Who Needs It


Product liability coverage is a type of liability insurance that is vastly misunderstood.

Who needs product liability coverage?, who does it protect?, how are claims filed?, and what type of claims are filed? are all questions that are commonly asked.

Most businesses wind up taking out a general business liability policy, and while those do usually have some product liability coverage, some claims will not be able to be covered using that general policy.

There are some little-known facts surrounding product liability that can drastically impact businesses and the types of insurance they should apply for.

Personal Injury Liability Due To Defective ProductsOne of these facts is that if someone has a claim for serious personal injury, damage, or loss related to the use of a defective product, they can actually bring that legal claim against any company who was involved in the release of that product to the public, whether the company is the manufacturer, distributor, inspector, wholesaler or retailer.

Another little-known fact is that any person who is harmed by the use of such a product can bring a claim, whether that person bought the product or not, or even if that person wasn’t even using the product!

These are simply two factors in product liability, and why a business should get product liability insurance coverage to stay protected from legal risks due to product defects.

For more information check out our full guide located here.

How Product Liability Insurance Helps Fight Product Liability Litigation

With the passage of time, the production rate has increased manifolds. The reasons behind this massive increase are the advancement in technology and the expanding demand. This has brought a huge profit to the industrial sector.

Businessmen who are manufacturers or traders are enjoying this situation, but on the other hand, they are exposed to a variety of risks. Risks faced are directly proportional to the expansion of business; the further you expand production; the more is the need of product liability insurance to fight a potential liability case.

Product liability insurance helps protect you from defective product claims. This type of policy has gained popularity due to its wide coverage over different circumstances.

Basically, this policy protects you from the legal formalities arisen from the claims of any of your clients. Sometimes the circumstances get so worse that, without an “insurance policy” it becomes difficult for the business to continue. Such claims include especially when a death occurs due to use of your product.

Financial disaster often can occur in any product business due to not being protected from liability due to unforeseen circumstances.

To protect yourself from such situations, it is very important to consult a good insurance company and adopt an insurance policy which suits your needs. It is wise to pay small amounts instead of facing a huge loss.

What The Average Person Knows About Product Liability and Coverage

When I ask the average person what they think about product liability insurance, the response I get usually is something like, “Go look it up on the internet – I don’t know!” While it can be something that the average person doesn’t understand or doesn’t know much about, a product liability insurance policy can be one of the most important things a business owner who deals with products in any manner could carry.

Why Imported Products Need Liability Insurance Coverage

Every month there are many products that are imported from overseas that will be sold to consumers. Many of these products will cause product liability claims and suits.

The companies that sell and distribute these products should make sure they are protected with products liability insurance coverage from a good insurance company.

A product liability claim can cost a business many thousands of dollars and even million dollars but a small product liability insurance policy will cost just a few thousand dollars.

Product liability insurance protects businesses from financial expenses that can come up during legal claims or law suits revolving around injury to persons or damage to property because of a defect in a product.

Any entity involved with the product can be held liable – the designer of the product, the manufacturer, the distributor, and the retailer.

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