Product Liability Insurance

Product liability insurance is to provide protection against financial loss arising out of the legal liability incurred by a distributor, manufacturer or merchant because of damage or injury resulting from the use of an insured product.

The areas that will be addressed when you seek this type of insurance will include the following:

  • Is this product safe?
  • Will this product perform well under ordinary or reasonable circumstances?
  • If the circumstances are extraordinary, how well will this product perform?
  • How well do you define your product? Do you give clear and complete information as to your product's attributes, warnings as to it's use (e.g. plastic bags are not toys) and intended use?
  • How is your product delivered? Have you provided your distributors with the training and information to safely transport, handle, demonstrate, install and service your product?
  • How well do you document the maintenance and issues of your product? Do you have records of any warranties, customer and retailer comments, recalls, industry data? How well have you done your research and how well do you maintain your records?
  • Is there a contingency plan in place for a safety issue? Do you have an emergency plan in place for the distributors of the product, government agencies that would need to be notified? How do you proceed with a necessary recall to protect the end consumers of the product?
  • What is your ongoing safety plan for now and into the future?

This is part of your risk management process and should be examined carefully. Take control of your insurance. Talk to your agent or broker.