What Are The Reasons a Small Product’s Business Needs Product Liability Coverage?


I’m sure you have heard of General Liability Insurance, a type of insurance covering basic risks (slip and fall) like accidents at the business but, what would a products insurance policy cover for a retail business?

What Is a Product Liability Insurance Policy?

Product liability insurance is business insurance coverage typically taken out by manufacturers and distributors.  It is also coverage for product retailers that safeguard the business from potential legal claims that arise

due to unsafe design, insufficient warnings or defective products being sold that may cause bodily harm or other losses.

Any business that sells a product that carries a potential liability should consider having insurance to protect against claims.

For the educated business owners, product liability business coverage is purchased by businesses to protect against claims made when a product is defective and causes some type of injury or death. All retail businesses should carry this type of insurance coverage for 3 main reasons.

Reason 1: Warning Label Issues

If a business sells a product without accompanying warning labels and results in injury or death, the consumer may file a lawsuit. Product liability insurance will help protect a business in this situation.

Reason 2: Defective Product Liability

Most lawsuits against business are a result of defective products that cause injury or death. Product liability insurance will cover a business sued over a defective product.

Reason 3: Flawed Product Design

Even if a business does not manufacture a product, if it markets and sells a product that has a flaw, it can be held liable for any resulting injuries or death.

The poor judgment and design of another individual can land a business in court and, without product liability insurance, in bankruptcy.

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