The Importance and Benefits of Product Liability Insurance

If you’re a developer or a producer of consumer good, chances are you need an appropriate insurance policy in place in order to protect yourself from liability claims against you from people that use your product. This policy can protect you from a wide array of liability claims, so it’s best you contact an insurance broker or agent and let them help you tailor a proper one.

One of the first things you should do when you meet with a broker or an agent, is to disclose all of your business activities throughout the entire year. Moreover, disclose your sales volume, else the claim payments may be affected. Simply put, be specific and straightforward with your broker. In fact, one way to find the right product liability insurance expert is by having them ask you a lot of questions about your business and your practices. Here are some of the ways that product liability insurance protects you.

Claims Against Your Product Causing Personal Injury

Unarguably the most common type of claims are personal injury claims. If someone has been injured while using your product, the policy will cover the costs that arise from a settlement negotiation or lawsuit. This is pretty straightforward and needs no further explanation.

Against Toxicity Claims

When you’re developing a product, you’re ensuring it’s developed with healthy materials and conditions. However, you may not always be in full control of the quality of the materials you use. That being said, it may happen that you use toxic materials that will make someone sick when they use your product. An insurance policy will protect you against these types of lawsuits.

Against Food-Borne Sickness

If you’re in the food-production industry, you’ll probably need to implement extra liability insurance policy. Sometimes, it’s an honest mistake and the product you sell bears unwanted consequences. But honest mistakes are still mistakes, and people will go after you and your money regardless.

Against Bystander Injury

Some products can injure not only the ones that use them, but bystanders as well. A bystander policy can be implemented into the liability policy so that you’re protected from claims from affected bystanders.

Against Property Damage

Similarly to the bystander policy, property damage can also be the reason for claims against you and your product. For instance, if you’re a solar system provider, and the solar panels somehow catch a fire and burn down the house, the owner of the home will have their insurance company look into it. And if the reason for the fire is determined to be in fact the solar panel that you provided them with, your insurance plan will cover the lawsuit and the potential settlement.