The basic Insurance policy for product liability claim issues is what is called product liability insurance. A lot of business owners are now aware of the many issues that can result from the problem of product liability (that is, issues like faulty products or one with defects).
As a result, they have taken appropriate measures to secure their business by getting this product liability insurance.
While the above statement is true of some business owners, a lot more out there neither knows the importance of this insurance policy for product liability issues nor what it covers.
The overall importance of the insurance policy for product liability claim protection is to offer financial security for businesses against the various forms of product liability risks involved in the business.
The essence of having a product liability insurance policy for a business is to ensure that such business is fully protected from liability issues that may arise from the business product.
Generally, this insurance policy for product liability claim issues provides a variety of coverage involving the following issues; harm to customers as a result of the use of faulty products, product spoilage, damage caused by products and safety and indemnity costs. It also provides coverage for the settlement of medical bills and other legal financial expenses.
Note that, the amount of liability coverage provided by the insurance agency where this insurance policy for product liability issues can be obtained differs. It is important to make adequate inquiries before choosing a company to apply for coverage and purchase from.
The Value of Product Liability Coverage to a Manufacturing Business
As we routinely engage in our daily activities, there are a number of unforeseen risks and circumstances that could occur.
Some of these include mistakes that could negatively affect not only our lives but those of other people as well.
There is, therefore, an inherent need to guard against such unforeseen liabilities primarily by taking out suitable insurance policies.
Fortunately, there are liability insurance policies to address virtually every facet of life, be they business or personal.
Product coverage for a manufacturing business is known as Product Liability Insurance Coverage is particularly important for businesses that deal in product manufacturing and production.
Sometimes, however, a business may be held liable even when it did not manufacture the product but only sold it. In legal cases where the business in question cannot clearly identify the manufacturer, or where the manufacturer is out of business, such a business can also be held liable.
For those in the business of selling or manufacturing products, the responsibility of ensuring the high quality of their products typically rests on them.
This means they are legally responsible for damages that may arise from the use of their products. This burden is certainly not the sort of burden that one should carry alone.
Product liability insurance coverage would help to cover the costs of dealing with such unfortunate circumstances on your behalf.
When claims are made as a result of faulty or damaged products, the ensuing lawsuits can be very expensive and time-consuming. Such suits can very well disrupt one’s flow of income, or drain the bulk of available funds.
Frequently Asked Questions
What is product liability insurance?
Product liability insurance provides financial protection for businesses that manufacture, wholesale, distribute, and retail products. It covers the legal costs if a product injures someone or damages property.
Who needs product liability insurance?
Any business involved in the production, distribution, or sale of products should strongly consider carrying product liability coverage. Even if you did not manufacture the product, you can still be held liable for selling a defective product.
What does product liability insurance cover?
Typical coverages include bodily injury, property damage, defense costs, and recall expenses. Policies can also cover financial loss caused by your product not performing as advertised.
How much product liability insurance do I need?
The amount of coverage you need depends on your potential risk exposure. Most experts recommend at least $1 million in coverage, but higher risk products like medical devices may require policies with $5 million or more in limits.
Does product liability insurance cover recalls?
Yes, most policies provide coverage for recall expenses if you need to pull a defective product from the market. This helps pay for notifications, shipping, disposal, and other costs associated with a recall.
Are there exemptions for product liability claims?
Product liability policies contain various exclusions where coverage would not apply. Common exemptions include damage from war, nuclear incidents, asbestos, and gradual pollution. Make sure you understand all the exemptions before purchasing a policy.