No matter the coverage you seek, one of the major elements you’ll consider is how much you spend. However, in the case of purchasing product insurance, it is no different. Factors affecting your product liability insurance cost are major considerations before purchasing.
Keep reading to learn more about how much you’ll spend to get enough coverage.
Who Needs Product Liability Insurance?
Selling a product qualifies you for product liability insurance due to the high incidence of lawsuits in today’s society. Hence, the following companies typically obtain product liability insurance:
- Online stores like Amazon, eBay, and Etsy
- Businesses that sell pets
- Print shops
- Producers and manufacturers
- Shops and stores
- Restaurants
- Wholesalers and distributors
A product liability insurance policy is also excellent for construction and contracting businesses.
Product Liability Insurance Cost
The average annual cost of product liability insurance for small businesses is $1,192. When it comes to product liability premiums, your industry counts. Here are some illustrations below:
- The annual premium for a manufacturing company ranges from $736 to $1,854, with an average of $1,146.
- Wholesale businesses paid an average premium of $1,159 for general liability insurance, including product liability. The premiums are anywhere from $751 to $2,431.
The conditions listed below also affect how much product liability insurance costs:
- Where you do business
- Claims history
- Policy limitations
How Product Type Affects the Cost of Insurance
The type of product that a business creates, manufactures, or sells greatly impacts the product liability insurance cost. Products differ in their propensity to cause either property damage or human injuries. Insurance rates for product liability insurance take into account this wide range of risks.
Firstly, businesses that offer safer products like office supplies and stationery demand lower premiums On the other hand, examples of products having a higher risk include bicycles, electronics, and furniture. The greatest risk, however, is from kids’ food, beverages, and products. These products will have some of the highest premiums for product liability insurance.
