Frequently Asked Questions
What types of businesses typically need product liability insurance?
Here are some specific businesses that are more likely to need product liability insurance:
Manufacturers of any product, including toys, furniture, appliances, and food.
Distributors and wholesalers of products.
Retailers of products, especially those that are considered high-risk, such as electronics, toys, and sporting goods.
Service businesses that repair or modify products, such as mechanics and plumbers.
Businesses that sell products online.
Talk to one of our experienced commercial insurance agents to find out more. There are other types of businesses that may need product liability. For example, a coffee shop that sells hot coffee might need liability if a customer was burned.
How much will product liability insurance cost?
The amount of product liability insurance you need will depend on the size of your business, the types of products you sell, and the risks involved.
An experienced agent will help you determine the right amount of coverage.
What are some examples of product liability cases?
Defective design: This is a product liability case where the product itself is inherently dangerous due to its design. For example, a toy with sharp edges that can cut a child's skin would be considered a defective design.
Manufacturing defect: This is a product liability case where the product is defective due to a mistake made during the manufacturing process. For example, a car with a faulty brake that causes an accident would be considered a manufacturing defect.
Failure to warn: This is a product liability case where the manufacturer fails to warn consumers about the dangers of the product. For example, a drug company that fails to warn consumers about the side effects of a medication would be liable for any injuries caused by the medication.
Misrepresentation: This is a product liability case where the manufacturer makes false or misleading statements about the product. For example, a car dealer that claims a car is "safe" when it is actually known to be defective would be liable for any injuries caused by the car.
Product Liability Insurance Evaluation
Here are some things to consider if you think you need product liability insurance: ​
Nature of your business:
Do you design, manufacture, sell, or distribute products? If yes, you are more likely to need product liability insurance.
What types of products do you handle? Products with higher risk of causing harm, such as food, electronics, or machinery, are more likely to require coverage.
What is your role in the supply chain? Even if you don't manufacture a product, you may still be liable if it causes harm.
​Industry regulations: ​
Some industries have specific regulations requiring product liability insurance. For example, pharmaceuticals and medical devices often require this coverage.
Potential lawsuits
Consider the likelihood of someone suing you if your product causes harm. This depends on the type of product, its safety record, and your history of lawsuits.
Your financial resources:
Product liability lawsuits can be expensive to defend. Having insurance can help protect your business from financial ruin.
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Here are some general guidelines:
If you sell products to consumers, it is highly recommended to have product liability insurance.
Even if you don't sell directly to consumers, you may still need coverage if your products are used by others.
If you are unsure whether you need coverage, it is best to consult with a risk management professional or an insurance agent.