Product liability insurance protects businesses against claims related to products they manufacture, distribute, or sell. In our litigious society, this coverage is essential for product-based businesses.
What is Product Liability Insurance?
This insurance covers claims alleging that your product caused bodily injury, property damage, or other harm to a third party. It applies whether you manufacture, distribute, or simply sell products.
Examples of Product Liability Claims
- A defective appliance causes a house fire
- Contaminated food products cause illness
- A toy injures a child due to design flaws
- Software failures cause business losses
Supply Chain Risk Factors
Your liability can extend beyond products you directly manufacture:
- Supplier quality control issues
- Inadequate product testing
- Poor labeling or warnings
- Design defects from manufacturers
Cost and Coverage Trends in 2025
Factors affecting costs include:
- Product complexity and risk level
- Sales volume and distribution channels
- Quality control procedures
- Historical claims experience