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What is Product Liability Insurance?
Product Liability Insurance is a an insurance policy designed to cover any losses that result from third-party claims as a result of injury or property damage suffered by any third-party due to a product you sold to them.
Liability, in general, refers to you or your business being responsible for injuries or other damages to a third-party, in the eyes of law. Product Liability Coverage provides protection in cases where you are held liable due to a product you manufactured or sold. Damages usually covered by product liability usually stem from design defect, manufacturing defect or marketing defect (incorrect labelling and safety warnings).
Any other damages to a third-party, such as slip n falls, would be covered under a separate policy, known as general liability.
Who Needs Product Liability Coverage?
Any business that manufactures or sells a product should, including food, should consider protecting their business with product liability insurance. Some examples of businesses that often purchase this coverage:
How Much Does Product Liability Coverage Cost?
The cost of your insurance policy will be affected by many factors, including but not limited to:
Type of product sold and associated risks
Volume of products sold
Source of suppliers
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General Liability Insurance provides protection in a wide range of cases where a third-party suffers injury or property damage either on your premises, or you or your employees cause damages on the third-party’s premises. Product liability only extends as far as such damages being caused by a product that you sold or manufactured. For example, if a customer were to be injured due to a slip n’ fall at your store, any subsequent insurance claim may be covered by general liability but not product liability.
Is Product Liability Insurance legally mandatory for retail and e-commerce stores?
In most industries, product liability insurance is not mandatory, however, it is strongly recommended, especially if you sell items that could easily result in claims. For example, food items may lead to food poisoning. Clothing items may also lead to skin reactions.
Does Product Liability Coverage cover damages to my stock and inventory?
No. All forms of liability insurance only cover damages to a third-party. Injuries to you and your employees, and damages to your assets, including stock and inventory, are not covered under Product Liability.
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Zensurance has been the easiest company I’ve ever received insurance from. Simple, painless and responsive, look no further than Zensurance for your company’s insurance needs.
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The Zensurance team was responsive, professional, and knowledgeable. Zensurance knew exactly what we were asking for after a few minutes on the phone. I would highly recommend them for liability insurance especially if you’re not sure what you need to protect your business.