Product Liability Insurance
What is Product Liability Insurance?
Product Liability Insurance covers you against damages awarded as a result of damage to property or personal injury caused by your product. A product of the business is a physical item that can include anything manufactured, installed, altered or repaired and is sold or given away.
Why do I need Product Liability Insurance?
Products must be 'fit for purpose'. You're legally responsible for any damage or injury that a product you supply may cause.
If you supply a faulty product, claimants may try to claim from you first, even if you did not manufacture it. You'll be liable for compensation claims if:
- your business' name is on the product
- your business repairs, refurbishes or changes it
- you imported it from outside the European Union
- you cannot clearly identify the manufacturer
- the manufacturer has gone out of business
Otherwise, the manufacturer is liable.
However, you must also:
- show that the products were faulty when they were supplied to you
- show that you gave consumers adequate safety instructions and warnings about misuse
- show that you included terms for return of faulty goods to the manufacturer or processor in any sales contract you issued to the consumer
- make sure that your supply contract with the manufacturer or processor covers product safety, quality control and product returns
There are generally three types of products "claims" a company may face:
- Manufacturing or Production Flaws- A claim that some part of the production process created an unreasonably unsafe defect in the resulting product.
- Design Defect- A claim that the design of the product is inherently unsafe.
- Defective Warnings or Instructions- The claim that the product was not properly labelled or had insufficient warnings for the consumer to understand the risk.
Product Liability Insurance protects you against damages awarded as a result of damage to property or personal injury caused by the products you supply. However, Products Guarantee, Financial Loss and Products Recall insurance is available for specific types of products such as: electrical, automotive, aviation, food etc. and the coverage would include:
Products Guarantee - removal, repair, replacement, alteration, treatment or replacement of product which fails to perform its intended function
Financial Loss - incurred by a third party arising from the defective product and for which the insured is legally liable
Products Recall - Product Recall insurance provides protection for you in the event you must recall any of your products. Coverage can include product recall expenses and liability to third parties seeking damages because your product recall could cause a loss of income or damage their reputation.
To find out more about this cover and how we can help you ensure that your business is protected in all aspects of liability, please contact a member of our team on Nottingham (0115) 9420111.