Do You Need to Check Your Product Liability Insurance Coverage?


Are you covered? Check your product liability insurance coverage.

Your product liability insurance should protect your business from claims related to the manufacture or sale of your product(s) to the public.

It should cover your liability for losses or injuries caused by a defect or malfunction of the product to the buyer and /or user of your product. In some circumstances, loss or injury to the buyer or user through a defective design or a failure to warn the buyer or user.

There are three basic types of products “claims” your company may face:

  • Manufacturing or Production Flaws– This is a claim that some part of your production process created an unreasonably unsafe defect in our product.
  • Design Defect- This is a claim that the design of your product is inherently unsafe.
  • Defective Warnings or Instructions- The type of claim is that your product was not properly labeled or had insufficient warnings for the consumer to understand the risk.

Damages awarded in these types of claims can include compensatory damages, economic damages, attorneys’ fees, medical costs, and punitive damages. Product liability claims can put your business out of business, so check your product liability insurance coverage.

Also, If your business manufactures or sells a product it could be held liable for damages to a person using it. The smart thing to do is make sure you have a product liability insurance policy in place to cover this type of liability.

In most cases, some form of insurance coverage will be present in the standardized business general liability insurance or business owners insurance policy but you will need to confirm this with your insurance professional to make sure you have ample coverage for the type of liability that could be attached to the product you sell to the public.

There are just a few steps you can take to minimize your vulnerability to lawsuits due to product liability negligence.

For manufacturers, sellers and many other small businesses working with food products having ingredient statements, full correct usage instructions and even warnings about how not to use the product can be printed directly on the items.

Also, having the proper packaging and user manuals giving further instructions and assumption of risk warnings, contact information and what to do should the product malfunction are helpful but still don’t provide complete protection.

It is difficult to imagine all the scenarios and conditions in which your products will be used (or abused).

The safest course would be to contact a law firm that specializes in product defect and strict liability claims policy and let them chose the policy that best fits the product or service you provide.

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