Product Liability Insurance

What is Product Liability Insurance?

Even though small businesses have put in a lot of effort to ensure high-quality products, there’s still the possibility that some products might not work correctly. A children’s clothing company might make clothes that are too tight and cause suffocation hazards. Or a food service provider could make pastries that contain an allergen that causes allergic reactions.

There are always potential defects that could cause bodily injury or property damages. These risks are not something your company nor your customers can afford. All businesses selling products need product liability coverage.

Product liability insurance

How Does Product Liability Work?

Product liability insurance does more than provide a guarantee or warranty on a product. It covers businesses against the consequences of a product causing injury or other damage to third party.

How a product is made, designed, market, or used can have a negative impact on consumers. Your business may still be responsible for any harm that is caused by a product being used incorrectly.

Your business is responsible to make things right. In the event of a lawsuit, product liability insurance can protect you. There were 58,496 product liability/personal injury cases in 2014, a 20% increase over 2013. One law firm discovered that the average jury award in product-related lawsuits was $3,439.035. The median award was $1,503,339.20. Small businesses have become more dependent on product liability coverage due to the increasing number of claims and high costs of lawsuits.

A product liability lawsuit can be stressful and costly. Product liability insurance pays for legal fees that could cause major hardship. The insurance also covers compensatory, business, and medical expenses.

Product liability insurance

How Much Product Liability Insurance Does Your Business Need?

The amount of coverage you need depends on the products and quantity sold, as well as the involvement of production parties. The likelihood that a product has a defect is higher for products with more output. This could be a greater concern as your small business grows.

Even if you are not involved in manufacturing, sales or distribution, product liability insurance is essential. To make sure that you are covered, speak to an agent today