Product Liability Insurance: What You Need to Know

If you manufacture, distribute, or sell any type of product, you need to make sure you have product liability insurance. This type of insurance protects your business in the event that one of your products causes injury or property damage. In this blog post, we’ll give you an overview of what product liability insurance is, how much it costs, and how it works.

What is product liability insurance?

What does product liability insurance cover?

Product liability insurance is a type of insurance that provides protection for businesses against claims arising from injuries or damages caused by their products. It can cover lawsuits brought by customers, employees, or other third parties who allege that they were harmed by a defective or dangerous product.

Do I need product liability insurance?

You may need product liability insurance if you manufacture, distribute, sell, or service products. Even if you are not required to have this coverage by law, your customers or business partners may require it as a condition of doing business with you. If you are not sure whether you need product liability insurance, talk to your lawyer or an insurance agent.

How much does product liability insurance cost?

Factors that affect the cost of product liability insurance

There are a few factors that will affect the cost of your product liability insurance.

The first is the type of business you have. If you manufacture a physical product, you will likely pay more for insurance than if you provide a service. This is because there is a higher risk of someone being injured by your product.

The second factor is the size of your business. A larger business will usually pay more for insurance than a smaller one, as they are more likely to be sued if something goes wrong with their product.

Finally, the amount of coverage you need will also affect the cost of your policy. If you need more coverage, you will pay more for your insurance.

How to get the best price on product liability insurance?

There are a few ways to get the best price on product liability insurance. The first is to shop around and compare rates from different insurers. Make sure to compare apples to apples, and get quotes for the same amount of coverage from each company. The second way to save money on your policy is to raise your deductible. A higher deductible means you will pay more out of pocket if you have a claim, but it will also lower your premium. Finally, you can save money by bundling your product liability insurance with other types of insurance, such as property or casualty insurance.

How to find the best product liability insurance

How does product liability insurance work?

The claims process

If you have product liability insurance and someone files a claim against you, the first thing you need to do is notify your insurer. Your insurer will then investigate the claim and determine whether or not it is covered under your policy. If the claim is covered, your insurer will pay for the damages up to the limit of your policy. If the claim is not covered, you will be responsible for paying for the damages yourself.

It’s important to note that product liability insurance does not cover every possible type of claim that could be made against you. There are some types of claims that are specifically excluded from coverage, such as claims arising from defective products that you manufactured yourself. Additionally, product liability insurance typically does not cover punitive damages, which are damages awarded to punish a wrongdoer.

Product liability insurance is a way to protect your business in case of a claim that a product caused injury or damage to a person or property. It covers legal costs and settlements. The amount of coverage required by a business is based on the amount of product sales and the amount of liability. While it is possible to get a policy with general liability coverage, it may have a lower payment limit than a separate product liability policy. If your business sells high-risk products, you may want to consider purchasing a separate product liability policy.

Product liability insurance protects a business from claims that a product caused injury or property damage

Product liability insurance is a type of insurance that covers a business against claims that a product caused property damage or injury to a third party. Some industries are more likely to be targeted by product liability claims than others, so businesses in these industries should consider purchasing the appropriate level of coverage. Insurers consider a number of factors when determining the proper level of coverage for any particular business.

Product liability insurance covers the costs of legal fees if a customer sues due to a defective product or service. This type of coverage is essential for businesses because even the smallest product can cause injuries or damage to people. The amount of coverage you choose should depend on the risk of your business and the amount of cash you’d like to invest in the policy. If you’re unsure of the amount of coverage you need, consider consulting an insurance broker who specializes in product liability insurance.

It can cover legal fees and settlements

Product liability insurance covers the costs of legal fees and settlements in cases where a product or company is found liable for bodily injury or property damage. A judgment may include medical expenses and interest that must be paid on the judgment. A company must ensure that its policy limit is higher than the average payout, or it may end up incurring large losses.

Product liability insurance is an important investment for any business that manufactures or sells products. It pays legal fees and damages resulting from lawsuits, which are expensive. Product liability insurance also protects contracting and construction businesses from costly lawsuits.

It excludes intentional acts

Many insurers invoke the intentional acts exclusion to deny coverage when a police officer acts intentionally, such as shooting an unarmed civilian or using excessive force during an arrest. To be covered under this exclusion, the insured must prove that the act was intentional and that it was committed with the intent to cause injury. While most courts agree that the defendant must have intended to cause injury, they are split on the level of intent necessary.

The policy wording is critical. The insurance company must decide whether the intentional act or failure to act constitutes a “derivative” tort. If the underlying elements are sufficiently dissimilar, the negligence claim will not be deemed derivative. If it is, the insurance company must defend against the claim.

It is based on volume of sales

According to a federal task force, product liability insurance costs less than one per cent of sales in most industries, but up to 10 per cent in some. The costs are passed on to retailers, who in turn pass them on to consumers. While the cost can be prohibitive for smaller companies, it is vital that manufacturers and distributors carry product liability insurance.

The amount of premium depends on many factors, including the product’s category and position within the supply chain. For example, a handbag retailer will pay a lower premium than an insecticide manufacturer. In addition, the costs tend to be higher for imported products than for U.S.-based companies. However, low-risk companies may qualify for a discount.

It is expensive

Product liability insurance is an essential component of any business, but it’s not cheap. It can cost upwards of $10,000 a year, but it protects a company from regulatory issues and potential lawsuits. Without this coverage, a company risks hefty fines from the Consumer Product Safety Commission.


Product liability insurance is an important type of insurance for any business that manufactures or sells products. It can protect your business from costly lawsuits and damages resulting from product defects or injuries. This insurance typically costs between 1-5% of your total sales, depending on the factors mentioned above. To get the best price on product liability insurance, it’s important to shop around and compare quotes from different insurers.

The claims process for product liability can be complex, so it’s important to understand how it works before you need to make a claim. If you have any questions about product liability insurance, be sure to speak with your insurer or an experienced attorney. Thanks for reading!


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