Product liability covers goods that you make available to the public directly or indirectly for consumption or use. Throughout the distribution chain ; design, components, assembly, manufacturer, wholesaler, transporter, distributor and retailer have product liability risk. Product Liability Insurance provides your business with financial and legal cost protection.

What Does Product Liability Insurance Cover?

Product Liability Insurance policy’s will provide coverage against an accusation and potential claim resulting from damage to property or personal injury that your product caused. Additionally may provide coverage against unforeseen circumstances, such as defects in your products that may have not been identifiable. This coverage should be available even if your business is negligent, subject to certain policy exclusions like intentional acts and deliberate wrongdoing. Product liability coverage will take care of most judgments that could be entered against you up to the policy limit less any deductibles or retention requirements. Most importantly, should pay for defense costs of a suit against you.

Who Should Have Products Liability Coverage?

Manufacturers, labs, distributors, suppliers, retailers and others whose product could be claimed by another to have caused harm or injury from consumption. Any business entity or individual who puts their name or mark on a product should maintain product liability insurance coverage.

How is the cost of coverage determined?

Product liability premiums are based upon the product, sales volume, and your role in the process. Most importantly, do not under report or try to insure less than the actual amount of sales. Policies generally provide for substantial under-insurance penalties when you fail to purchase the correct limits. You will want to make absolutely sure that your products are properly identified. For example, if you supply adjustable step stools or portable temporary steps do not categorize these items as ladders.


In most cases, some limited form of this coverage will be present in most commercial general liability (CGL) or business owners’ policy (BOP).

However, when products liability is part of a commercial general liability policy, the coverage may be referred to as products-completed operations insurance. Importantly, limits are generally lower on these standard types of policies. Carefully determine the financial exposure to your business and personal assets. The increased coverage and limits will be worth the cost should a claim arise.

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