Any company that manufactures a product should invest in product liability insurance. Even manufacturers with well-equipped quality control departments might occasionally supply defective products. This can lead to complaints that turn into lawsuits. Here are some important points to know about product liability coverage.
Product liability insurance is necessary in case units of your product are defective or cause harm to consumers. Your business can get sued for many reasons relating to dissatisfied customers, especially if the product injures numerous people. It can then turn into a class-action lawsuit, running up major legal costs.
Contractors, manufacturers, and retailers generally need product liability insurance. While this coverage does not protect software designers, coding errors can be covered by errors and omissions insurance. Even though a retailer may be different from the manufacturer, the retailer can still get sued by the customer who buys a broken or hazardous product from its store.
Appliance and home improvement equipment installers may be sued if the installation is done poorly, and the owner is then forced to start over. Likewise, a hairstylist can also get sued if they apply a product that causes allergic reactions or other health issues, or a catering service can get sued if they serve food that causes illness.
Here are just some professions that commonly carry product liability insurance:
Even though general liability and product liability are often packaged together, they are separate policies. Many firms utilize general liability insurance as their primary policy and then add other forms of coverage as needed.
General liability covers many types of lawsuits, particularly those involving reputational damage. The coverage pays for attorney costs, court fees, and settlement amounts. However, it only covers a limited amount of ground and excludes product liability coverage, which can be added as an add-on.
Product recall insurance is typically separate from product liability coverage. Therefore, ask your Insurance provider about adding it to your coverage. Remember that if you don't have the right insurance in place when a disaster happens, it could mean litigants will come after your personal assets.
General liability insurance is fairly inexpensive, with a median price of around $42 per month. Each insurance agency sets its own price, so you should compare costs online among insurers licensed in your state. Not all general liability plans include product liability, but it's easily added as an extension for an additional cost.
The main factors that affect business insurance costs are the amount of coverage, risks, location, and size of the operation. Manufacturers with high risks, such as those that use dangerous machinery or chemicals, typically pay higher insurance costs.
Also Read: What Is Products-Completed Operations Coverage and Who Requires the Plan?
Inquire with an insurance specialist about product liability insurance and see what coverage is right for you. At Graystone Insurance Group, we offer customized business insurance plans. Contact us today to get the right coverage you need to protect your business.
