Product Liability Insurance

Product Liability Insurance

Protect your business from product-related claims and lawsuits with Product Liability Insurance.

Zensurance - product liability insurance

Partnerships with over 50 leading Canadian insurance providers

Partnerships with over 50 leading Canadian insurance providers

Why Choose Zensurance?

We help Canadian small business owners save time and money by providing
a convenient and affordable way to buy business insurance.

Claims Examples


Problem: A customer claims a skincare product you formulated and sold to them caused a severe chemical burn.

Outcome: Your client successfully sues for bodily injury. Your Product Liability Insurance covers the medical fees and legal expenses, totalling $85,000.


Problem: A customer claims a malfunction in the toy they purchased from your e-commerce site caused their toddler to choke.

Outcome: The customer successfully sues you for bodily injury. Your Product Liability Insurance covers the legal expenses and costs to recall the product, totalling $134,000.


Problem: Your distribution company is named in a lawsuit against one of your retail suppliers regarding a design malfunction.

Outcome: Your Product Liability Insurance covers the legal expenses and monetary judgment, totalling $330,000.

Product Liability Insurance, Explained.

What is Product Liability Insurance?

Product Liability Insurance protects business owners against claims alleging third-party property damage or bodily injury caused by a product you manufacture, distribute, or sell. It protects your business from damages from design, manufacturing, or marketing defects, such as incorrect labelling and safety warnings.

What is not covered by Product Liability Insurance?

Product Liability Insurance only covers third-party property damages or bodily injuries caused by a product you sell or manufacture. Any other damages to a third-party, such as slip-and-fall injuries, would be covered under a separate general liability insurance policy.

How much does Product Liability Insurance cost?

The cost of Product Liability Insurance will vary depending on the type and volume of products you sell, manufacture, or distribute. 

The following factors are typically taken into consideration when determining the cost of your premium:

  • Type of Product and Associated Risks
  • The volume of Product Sold 
  • Claims History 
  • Coverage Limits 
  • Annual and Projected Revenue

Note: your Commercial General Liability Insurance may not automatically include product coverage. Speak to your broker about customizing your policy to meet your specific business needs.

Who needs Product Liability Insurance?

Product Liability Insurance is recommended for anyone who sells, manufactures, or distributes a product, including food.  It is beneficial to online retailers, as well as those operating a brick-and-mortar location.

If you are a member of a distribution chain, ensure all suppliers, manufacturers, and distributors are adequately insured.  Please discuss with your broker whether or not you need to add them to your policy.  Conversely, make sure you are included as an additional insured on their policies, as you can be held responsible for product liability on their end, too. 

If you import or export products outside of North America, verify that the products are compliant with industry standards and that all labels contain the required and appropriate information. 

Does Product Liability Insurance cover services?

No, Product Liability Insurance does not cover service-related claims and only covers third-party property damage or bodily injury caused by a product you sell, manufacture, or distribute.

Claims associated with failure to provide a service as advertised, negligence, or misconduct are covered by Professional Liability Insurance, also known as Error and Omissions.

How much Product Liability Insurance do I need?

The amount of coverage you need will vary based on factors such as product type, associated risks, and volume. Speak with your broker to determine the adequate coverage for your specific business needs.

Frequently Asked Questions about Product Liability Insurance

What is the difference between Product Liability Insurance and General Liability Insurance?
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 Insurance.

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