What Is Product Liability Insurance and Why Your Business Might Need It

If you’re in the business of manufacturing, distributing or selling goods and products, you likely need to account for significant risks and exposures. As part of a supply chain, you should be aware that many defects and issues can sneak into even the most diligently produced goods. In such situations, your customers and clients could be the ones who are initially impacted, but such incidents could eventually impose extensive financial losses on your company. That’s where product liability insurance can play an essential role in loss control.

How Does Product Liability Insurance Work?

As its name suggests, product liability coverage is a specialized form of insurance designed to help absorb and alleviate losses and damages arising from incidents caused by defective goods. This type of coverage is often included in general liability insurance but may also be available as a standalone policy from some carriers.

Regardless of how you secure product liability insurance, doing so can establish robust financial security and peace of mind for your company. In exchange for your regular (e.g., monthly) premiums, you retain the right to file a claim for financial aid should an affected third party file a lawsuit alleging your products caused them harm.

Why Does My Business Need Product Liability Coverage?

An appropriate product liability insurance policy can offer versatile coverage for a number of losses and expenses arising from incidents involving your business’s goods. Whether you’re a manufacturer, retailer, wholesaler or otherwise engaged in a supply chain, the right coverage can help pay for the following:

• Medical expenses arising from third-party bodily injuries caused by your goods

• Damage to customers’ and clients’ property caused by your products

• Legal costs, such as attorney fees, settlements and judgments arising from lawsuits

Given these potentially expensive costs, having the right coverage can make all the difference in successfully navigating the aftermath of incidents involving your products.

We’re Here to Help

Contact Shoop Insurance in Center, Texas, today to learn more about product liability coverage or to get a free quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.