Product Liability Cover Explained

Product Liability is cover for any business that is involved in producing a product, be it making, repairing or selling products.  It covers any serious defects or problems that may emerge.  Product Liability is not compulsory in most industries, but many contractors may insist that businesses have it.

Product Liability insurance covers any defects in products that may arise, causing damage or injury due to their design or manufacture even if there is no negligence.

Product Liability covers businesses against any claims made by members of the public who have suffered bodily and/or damage caused by products that have been manufactured, supplied or repaired by a business.  For example, a toy manufacturer will be held liable if a faulty toy design causes injuries.  A business might be held liable for damages and injuries suffered as a result of using its products even if it isn't negligent.

A product liability policy will normally cover a business for claims made regarding quality of service or manufacture, spoilage, safety and indemnity costs, which includes things such as medical bills or legal expenses.  Cover is subject to standard policy terms and conditions.

It is important to remember that product liability does not cover a business that makes an inferior product or supplies bad services.  Having product liability insurance does not relieve a business from taking statutory care in its business operations, and your insurer may require you to observe certain standards such as the use of proper equipment and trained staff.

A business should look to itself and its working practices to decide how much product liability it needs.  Product liability insurance is expensive, due to product liability insurance being a rather specialist market, but the costs that could possibly be faced in the event of a claim or court case will almost certainly be greater.  If the case were to go against a business, costs could run into hundreds of thousands, sometimes millions.