What is Product Liability Insurance
As you manage your small business, you may create products sold directly to consumers, move on to other companies and beyond. You might not have even considered product liability insurance in the past because you generally have happy customers and have not experienced any issues.
However, this type of insurance is essential to business success, and you can use the tips below to learn all about it.
How Does Product Liability Coverage Work?
When you purchase product liability insurance, you receive coverage for all products or services you sell or create. If those products or services harm someone else, damage their property, cause emotional distress, or result in death, the policy protects you from the personal injury claims that will follow.
When you file a claim against the policy, you receive both legal assistance and monetary coverage if you must pay an injured or bereaved customer.
Types of Businesses That Need Product Liability Coverage
Product liability coverage is not exclusive to the manufacturing sector. Yes, manufacturers are open to liability because they create and distribute products that could cause injury.
However, retailers should also carry product liability coverage because they sell products every day and could become the target of personal injury claims.
Additionally, wholesalers and distributors should purchase product liability policies to protect themselves because they are a part of the supply chain.
How Do You Purchase Product Liability Insurance?
Reach out to a commercial insurance agent who works with companies like yours. As you look at product liability coverage, discuss the type of business you manage, the products you create, and any claims you’ve faced in the past.
At times, product liability coverage may be included in a general liability policy. Remember, though, product liability insurance is not the same as:
- Business property insurance
- Umbrella coverage
These policies cover something other than claims brought against your business due to product defects or malfunctions.
How Much Product Liability Insurance Does Your Business Need?
According to the Insurance Information Institute, product liability jury awards are double or triple most other claim types. As a result, your business requires coverage that exceeds industry standards and falls in line with the kinds of products you manufacture.
Review your coverage with an agent to ensure that your business is protected. Generally, product liability coverage should pay for:
- Medical costs for customers who are injured by your products or services
- Legal fees necessary to defend your business
- Settlements or judgments levied against your business
Yes, your business is set up as a corporation separate from your personal finances. Still, a successful claim against your business could bankrupt the company, cost your employees their jobs, or lead to a lifetime of debt if you are not covered.
Contact Us Today
Now that you know more about product liability insurance, it’s time to take action, protect your business, and safeguard your investment. Have questions about product liability Insurance? Ready to Get Started? Get in touch.