Product liability Insurance

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A guide to product liability insurance

As a business owner you will need to arrange insurance to protect your business against risks, including producing or selling faulty products. Although it may seem unlikely to happen, it is impossible to remove every potential risk. However, product liability insurance is available to ensure your business is protected financially, should a claim be made.

Do I need product liability insurance?

If your business manufacturers, imports or repairs products which are passed on to customers, this is often enough to make you liable. In addition, if a business sells a product which includes the printed business name, they are liable. Alongside these situations, if the original manufacturer is no longer in business or unidentifiable, the seller is held liable.

Not every business requires product liability cover, usually it will depend whether your company offers a service or a physical product.

As a retailer you may not be responsible for products sold, but you will still have a duty of care to your customers. This can be achieved by taking the steps required to ensure they are safe for their intended use. For example, by providing instructions or warnings and taking a proactive approach to improving safety.

Product liability claims can be expensive, time-consuming and damaging to your reputation. If a faulty product is widely distributed it is not uncommon for claims to escalate into the millions.

This means every business who could be held liable should arrange adequate product liability insurance.

There is no upper limit on how much a claim could be, so you could quickly be put out of business without insurance. Every claim is treated on an individual basis, with compensation calculated based on the severity of the injury or scale of loss. This means that your business must decide how much cover you require, as being underinsured could lead to a significant financial loss.

What is product liability insurance?

Product liability insurance is designed to protect your business, if a customer makes a claim relating to a product which you have either produced as a manufacturer or sold on as a reseller. For example, if a customer is injured by a product you have manufactured, it is likely they will be able to make a claim. Claims are eligible against manufacturers for products within three years of their sale date, although this is longer in some cases.

Product liability insurance will cover liability for compensation, legal costs and other expenses associated with the claim against you. There is always a chance that the unthinkable can happen, so it is important to ensure you are covered. It is important that you are covered as soon as you begin supplying products. If you stop trading, it is still advisable to hold the appropriate liability insurance, as a future claim may still be made.

How do I find the cheapest defective product liability cover?

We have partnered with a selection of leading insurers, which are able to provide competitive product liability cover. Simply let us know the type and level of cover you require, and we can help you find the cheapest quote. Our team will arrange quotes on your behalf, so that you can quickly compare your options in one place.

It is important that you check the potential policies to ensure you are aware of exclusions and stipulations. This will ensure your business is able to adhere to the terms of the policy and remain covered. Once you have decided which policy to purchase, we will help you complete the process to obtain your policy.

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We specialise in helping businesses find the best deals for their insurance. This means we can help you arrange everything from cyber liability insurance to public liability insurance. To find out more about the various issues which can be covered with product liability insurance, please contact us.

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