Knowledge
Centre
FAQs from YOUR Insurance.
FAQs
Product Liability Insurance at a glance
Faulty or defective products can cause serious problems. For any
business involved making or repairing products, particularly on a
large scale, the risk associated with faults or defects is high -
and the financial implications could potentially run into millions.
We all know examples of products that have made it to market before
a problem is discovered. Product Liability Insurance ensures your
business can cope if an issue arises with the products you deal
with.
Who needs Product Liability Insurance?
If your business involves the manufacture, repair or sale of
products, Product Liability Insurance will provide a vital
financial safety net and is worth serious consideration. Recalling
products and fixing faults can be expensive. Add to those costs any
potential claims for medical expenses or compensation as well as
legal costs – and the implications become clear.
What does Product Liability Insurance protect against?
Product Liability Insurance provides protection in the event of
damage or injury caused by a product or a product design fault. It
also covers the risk of spoilage. Problems can occur as a result of
negligence during the production process, or may simply result from
issues that are not picked up during testing. Even if a business is
not found to be negligent, it may still be liable in the event of a
product subsequently causing damage or injury.
Is Product Liability Insurance compulsory?
No, for most industries Product Liability Insurance is not
mandatory, however it does cover risk to a significant level and
for this reason Product Liability Insurance is expensive compared
to other business cover. Some purchasing companies may also demand
Product Liability Insurance before buying from you. Professional
advice should be taken when considering the scope and level of
cover required for each business.
What’s covered?
- Damage caused by products
- Injury resulting from a product fault
- Spoilage
- Safety and indemnity costs
- Medical bills and legal expenses
