Product Liability Insurance Cover Quotes For Your Small Business

Product liability insurance helps to protect a business from any claims made against a business related to the manufacture or sale of any products including food, medicines and other goods to the general public. The public liability insurance will cover your business against any damage to property or a person.

Product liability insurance will also cover your business against any unforeseen circumstances such as, product faults that were beyond the control of your quality control system assessment. However, should you make an inferior product you may be unable to make a claim as bad workmanship is not covered by the policy.

Claims against product liability insurance are usually broken down into three basic categories which are as follows:

manufacturing or production flaws – this claim argues that a part of the production process caused the product to become unsafe
design defect – this claims contends that the product’s design is unsafe by nature.
incorrect warnings or instructions – this claim states that a product didn’t come with the correct instructions to avoid causing harm or misuse of the product

What does product liability insurance cover?

A business is legally responsible for any damage or injury that a product causes. A business must ensure that its products are “fit for purpose” and are safe to be sold on the market.

You may still be liable for a faulty product even if you haven’t manufactured it. You will liable for the product under the following circumstances:

your business’ name is on the product
your business repairs, refurbishes or changes the product in some way
you imported it from outside the European Union
you cannot clearly identify the manufacturer
the manufacturer has gone out of business

The manufacturer is liable for the product is none of these conditions are met. However, you will also have to show:

that the products were faulty when they were initially supplied to your company
that you provided customers with safety instructions and warnings about the misuse of the product.
that you included terms for return of faulty goods to the manufacturer or processor in any sales contract you issued to the consumer
make sure that your supply contract with the manufacturer or processor covers product safety, quality control and product returns
have good quality control and record-keeping systems

Which businesses need product liability insurance cover?

What type of company needs product liability insurance? Any company that provides products to the public need this type of insurance. Whether you are a toy company, café or restaurant you will need this cover. Often this type of cover is included in the standard commercial liability coverage or in the business owners policy. However, it is important to check to see if this is the case.

You may also be interested in learning more about employer’s liability insurance, public liability insurance or the various types of small business insurance available.