Product liability insurance compensates people who are injured by a faulty product made by your business, whether you have designed, manufactured or supplied it. A relatively small defect can easily lead to enormous claims, which makes the product vital for any firm that manufactures, sells or gives away products of any kind.
What’s covered?
If your business designs, manufactures or supplies a physical product, whether you sell it or give it away, this policy type provides the protection you need. It covers:
- Compensation for personal injuries caused by a faulty product you are responsible for
- Loss of or damage to property caused by a faulty product
- Unforeseen circumstances like faulty products that you could not have identified
If you just distribute a product but do not actually make it, you will be protected against claims:
- For products that were already faulty when they were given to you by the supplier
- Where you gave customers adequate safety instructions and warnings about the product’s misuse
- Where you included terms for the return of faulty goods to the manufacturer
- Where your supply contact includes product safety, quality control and returned goods
- When you have really good quality control and record-keeping systems in place