Perhaps you run a company or own a brand that produces certain products for consumption. If this is the case, you need product liability insurance to cover your goods. With this coverage, you can secure your business from financial losses that may occur when production errors occur.
Keep reading to learn more about product liability insurance and how it may benefit you.
What Is Product Liability Insurance?
This insurance shields your business from claims that a product you created, developed, manufactured, or sold resulted in physical injury. Here, this injury could be to a third party or material damage to their property.
Without product liability insurance, your business may be liable for paying accident-related expenses. Therefore, you may have to pay for medical bills, property damage repairs, legal fees, and other fees out of pocket.
What Does Product Liability Insurance Cover?
It will pay for any legal fees, medical costs, and compensatory damages demanded in third-party lawsuits. It resolves problems your product has caused, such as:
- damage to another person’s property
- bodily injury
- Illness
- unwarranted death
Also, it will cover the following flaws:
- Design Error of the Product: The product had a flaw in its design.
- Manufacturing Error of the Product: The manufacturing of the item was flawed.
- Inadequate Product Information: The lack of adequate directions was a marketing issue with the product.
- Erroneous Warning: The product’s correct use is not sufficiently covered in the instructions.
- Absolute Liability: A customer experiences injury from a product even if your business is not found to be liable.
What Factors Don’t Receive Coverage?
This service provides coverage for lawsuits alleging bodily injury caused by a product. It doesn’t deal with problems that software, applications, IT, and other technological things cause.
For instance, this insurance does not cover coding errors or software vulnerabilities that cost your customers money. Hence, you need mistakes and omissions insurance for technological problems.
It also exempts recall-related expenses, customer-related accidents, such as slip-and-fall injuries, and worker injuries.
