Product Liability insurance is a type of general liability insurance designed to protect your organization from financial and legal consequences due to the use of a product you sold, made, or distributed.
Insurance companies typically include product liability insurance as part of a general liability insurance policy. However, some businesses may need stand-alone coverage or to purchase an additional endorsement.
It’s important to note that Product Liability Insurance is third-party insurance, meaning it covers claims by third parties. Third parties include, but are not limited to, customers, vendors, or clients.
What Does Product Liability Insurance Cover?
Product liability insurance can provide coverage for the following:
- Product design defect: If there’s an allegation that a product was unsafe or dangerous from the conception of its design.
- Production or manufacturing flaw: This differs from a design defect in that the harm came from faulty production rather than the product’s inherent design.
- Injury or illnesses: Suppose an item you made and sold causes a bodily injury. In that case, product liability insurance would cover attorney costs and any potential settlement or judgment.
- Wrongful death: Product liability insurance also covers lawsuits and other costs related to a death caused by your product.
- Property damage: Insurance could provide coverage if an item you sell damages a customer’s property, whether from a product defect or an instructional mistake.
- And more
Products Liability Insurance for the Healthcare Industry
In the medical space, product liability insurance can help cover some of the following:
- Medical Devices, such as surgical tools, drug delivery systems, and other medical equipment
- Biotechnology firms, including allergenics and cellular or gene therapy
- In Vitro diagnostic products, including reagents, instruments, and systems
- Personal hygiene products, such as oral care, hair and skin care, and spa products
- and more
As an organization, you strive to provide the best quality products for your customers. However, there is no way to guarantee every single item. Product Liability insurance helps protect your business from financial risk due to one faulty product. Chivaroli & Associates can help you navigate the insurance marketplace and find the best defense for your unique risks.