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 Product Liability Insurance Claimsour 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 law suits 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.

Is Your Small Business Legally Covered by Product Liability Insurance?

Product liability insurance is a requirement for just about all types of businesses. If at the manufacturing level, something is made defective, insurance is needed there. If this defective product works its way through the chain to wholesalers and then retailers, both can be sued too, therefore, it is incumbent upon them to buy product liability insurance too.

Product liability insurance covers the manufacturer or seller’s liability to the buyer, user or just someone who might have been injured standing next to the product. A defect or malfunction in the product design is what you are being protected against, in the age of lawsuits, some frivolous. If a warning label, like on a motorcycle, was not included, this can be grounds for damages in a lawsuit.

Commercial sellers and re-sellers fail to obtain insurance in many cases because they think that they did not manufacture the product and are not libel. This is a grave mistake. Most states in the United States adhere to the “stream of commerce” notion. This states that if you are involved with the product in any way from manufacture to resale, to sell and to use, you are in the stream of liability. You must check your general business insurance to see if liability insurance is included.

If you under-report the sale of potentially defective or dangerous products to pay a lower premium on liability insurance and are caught, there are steep penalties applied. It is also important to list your items accurately. If you list an item that is more dangerous to the user as one that is not, then you will pay unnecessary higher premium rates. An example being a ladder is more dangerous than a chair, so you do not want to count chairs as ladders sold. Report your sales accurately, premiums are charged by item and volume of sales.

When you go into business liability insurance and product liability insurance must be counted in when figuring how much money is needed to start a business. Many people omit important costs of doing business and run into financial problems early in the life of the business.

Why Protect Your Business With a Product Liability Insurance Policy

Product liability insurance goes further than a general liability insurance. While in some instances general liability coverage, offers coverage for product liability, to a certain extent, a product liability insurance coverage specifically protects against damages which a product you supply may cause. Additionally, it provides protection from unforeseen occurrences such as product defects.

Oftentimes, business operators overlook the dangers that could occur from use of a product they sell, manufacture or distribute. Consequently, many businesses today are faced with numerous lawsuits and claims of injury, for which they are unprepared to handle legal liability.

Consumers at times find the design of a product unsafe. The defect sometimes may be a part of the manufacturing process. In the event a product you supplied was unsafe or has caused damages as a result, your legal implications of product liability would be covered by your risk policy and would serve as a protection for you in this case.

There are occasions also where the directions on how to use the product was insufficient or was just not available. Under these circumstances, someone can misuse the product causing injury to himself and others, or damage and loss to a third person’s property. You, the supplier can be held liable for the damages caused, as it is essential that warnings about a product and directions on how to safely use should be included with the product.

If you operate any business that manufactures, refurbishes, sells or distributes a product in any manner, it is essential to protect your business from damages of this nature. A liability insurance coverage can save your business from major financial loss and in some cases total ruin.

The Benefit of Negligence Insurance Protection for Product Liability

If you are into the product manufacturing business, you must get business insurance for products . This can protect you against damage claims made by people who have been harmed by the products. You can get protection against consecutive damage too. Serial damage is the damage of multiple persons from any defect of a product series. Liability can be reduced with the help of the law. The liability for damages can be reduced in a contributory negligence of the injured party.

A product liability insurance option can cover these types of damages.

The general rules related to product liability insurance are based on contributory Accident Liability from Product Defect. The validity of claims is a significant factor. The claims of the injured is barred beyond three years after the victim becomes aware of the damage. The limitation is due to the negotiations between the parties. Moreover, the law refers to the Provisions of the Civil Code. However, if more than 10 years has passed since the marketing of the product, there can be no more claims. In this case, you will not need the product liability insurance. nevertheless, the claim will be valid if there is a pending dispute or pending collection procedures.

Liability for defective products is the situation in which a manufacturer incurs problems due to a security breach of any of its products or services causing damage to any person whatsoever. This is a special regime of responsibility.

The product liability insurance can cover damage claims related to this. Liability for defective products was born July 25, 1985 in the form of a Community directive. It was 13 years later that this directive was finally transposed into law. The law inserted the articles on the responsibility for defective products under the Civil Code. In 1998, law introduced this liability regime with two fundamental characteristics:

  • Character of public policy: it means that we cannot deviate from the provisions by agreement with respect to the product liability insurance.
  • An optional character theory: it actually tends to be exclusive. According to the letter of the Directive, the victim could, if it wished, sue for its damages upon the basis of this law, or the common law.

However, the Court of Justice of the US Communities has imposed a restrictive interpretation of product liability insurance, which tends to displace any other regime of strict liability if the terms of this special scheme are met. The 1st Civil Chamber of the Court of Cassation has complied with this interpretation in 2007. Nevertheless, other decisions of this Court are expected to see the final confirmation. In US law, the exclusive nature of the liability for defective products makes product liability insurance a priority.

The scope of the purpose is quite big. The Civil Code defines the product in an extremely broad way. In its definition, only properties are excluded. An object will be considered a product, even if it is incorporated in a building, including the products of the soil, livestock, hunting and fishing. Electricity is considered to be a product as well. Thus, you will get product liability insurance coverage for electrical goods. The Civil Code defines repairable damage widely too. The provisions of this title shall apply to compensation for damage resulting from a personal injury. They also apply to repair of the damage with an amount determined by decree. The product liability insurance can protect the manufacturer from all sorts of damage claims.

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.

How Does Product Liability Insurance Relate to a General Liability Policy?

Product liability insurance policies and general liability insurance policies are commonly referred to business owners as necessary components for start up.

What’s the difference, though, and how does the coverage work together?

Most business product liability insurance policies can be purchased by themselves, independently of a general liability policy.

Most of the time, however, it doesn’t cost much more to get the more expansive general liability insurance, which happens to include some product liability protection.

Clearly, it’s in the best interest of the business owner to get general liability insurance if they can afford the slight increase in price, since the business would be protected in multiple areas in addition to product liability. To get more information about applying for a defective product liability policy, you may visit this great site (SADLER Products Liability Insurance) for more information.

Why Product Liability Coverage is a Must for Product Manufacturing and Sales

Product liability negligence can be very serious if a claim is made and your business is involved. Businesses that manufacture or sell products have risks that must have defense to product liability claims making a products liability insurance policy necessary. The product liability policy has some limits of coverage. The insurers limit their interventions to a certain amount per claim per year In addition; they encourage the entrepreneur to set up a prevention policy which is as effective as possible.

However, unlike other insurance policies for which the guarantee applies to claims that were between the date of inception of the contract and the date of termination, the product liability insurance may be applicable outside of this contract period too; provided of course that the insured has signed the two extensions specific for this type of contract.

These extensions are as follows:

  • A clause that focuses on “recovery of the past” that can take care of damage to products manufactured or delivered prior to the date of effect. The claim of the victim is made under contract;
  • And “subsequent” guarantee, which requires the insurer to support events that occur after the termination of the contract.

Product liability insurance covers damages to third parties. The liability insurance protects the insured against the claims made against him by third parties seeking his responsibility towards victims to obtain compensation for the damage caused to them.

Product liability insurance provides corporate responsibility after a cause of action for negligence, omission or negligence in the performance of products.

This liability insurance also covers expenses incurred by the insured for its own defense and or the company.

Products liability refers to the liability for damages against the manufacturer. This is for damages arising out of the end-users due to a defective product. It is in the Product Liability Act of most countries. The Defendant must be a manufacturer within the meaning of product liability law. A company needs to be considered valid as a manufacturer for the purposes of the Act.

The manufacturer is initially the one who makes the final product, but he is also a manufacturer of components within the scope. Another important aspect of product liability insurance is marketing. Starting point for the liability of the manufacturer is the fact that he has brought the defective product into circulation.

The Product Liability Act excludes the liability of the manufacturer, if he did not put the product into circulation.

The product liability claim of the injured needs to be made within three years after the victim becomes aware of the damage and the person liable must have knowledge or should have become aware about the damage. Your product liability insurance can cover this claim. It is inhibited by negotiations between the parties.

Even someone who is not the actual manufacturer of a product, must follow the liability concerns. For example, a party can pose as the manufacturer by affixing their name, trade mark or other distinctive mark. Here, the presence or application of a brand name or a trademark on the product is not absolutely necessary. Overall, this insurance policy can be of great help to you and when needed, it can help you save a lot of money.

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 Products

One 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 about applying for a product liability insurance quote, visit or call 1-800-622-7370 and ask for coverage.

A Few Simple Tips When Applying for Product Liability Coverage

product-liability-claimProduct liability insurance belongs to a type of liability insurance coverage, which typically does not contain a general structured plan. It is dependent on the type of business, like some may want to purchase the policy for sports goods or any other popular sort of business, and some may want it for an industrial or a less publicized business.

The companies involved in making goods are in a huge need of insurance as there is a usual practice to sue the firm for manufacturing defects, product imperfection, bad output, etc. There are a lot of points that you need to keep in mind while planning to purchase a product liability insurance policy.

Furthermore, you should be very careful while selecting your insurance agency.

Here are some tips that prove to be very helpful in the process of selection of an insurance agency and policy:

  • Have a thorough look at the areas covered by the insurance policy and see if it legally covers complex issues.
  • Many of the business professionals are not clear about their insurance coverage; it could be a result of an intentional or may be the unintentional lack of explanation by the insurance expert in the haste of selling the policy. In fact, many of the people confuse the term product liability with general public liability insurance.
  • It is worthy to note that both the policies are quite different from each other. Product liability insurance is meant to shield the business owner from any lawsuits resulting from a bad yield; whereas the policy that deals with all kinds of community dealings involved in a business is what we call a public liability insurance policy. As a matter of fact, both insurance plans are equally important for running a safe business, but most of the time people think that the policies as an alternative of each other.

The wiser decision is to choose an insurance plan that has qualities of both the policies and provides wider coverage.

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 occurs in business due to a lot of 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.