When is Product Liability Insurance Necessary?

Product liability insurance is a piece of added coverage that some businesses may have heard about, but are not sure exactly what it does or if they even need it. The coverage protects businesses when one of their customers incurs damages as a result of a fault with the product the business has provided to the public. From legal fees to compensatory costs, this kind of coverage is vital for businesses who are wanting to continue to make and sell products without blemishes to their production.

What Does Product Liability Insurance Cover?

Say your client’s business is mass producing a product with a widespread distribution. If this product—and it could be anything they produce—is faulty and ends up somehow injuring the people who buy it, this will most assuredly lead to legal issues. Even one individual who takes legal matters against the company can end up costing that company hundreds of thousands of dollars or more.

There really is no limit as to how much a claim can come out to be, and if it’s a widespread issue then your client could face dire problems. This is why product liability insurance is important because it protects against dramatic legal problems.

When is it Necessary to Have Insurance?

The simple answer is it’s always necessary to have this kind of coverage. While it’s not required, it should be touted as such.

Manufacturing or production flaws, design defects, defective warnings or instructions: they all bear the same liability. Lawsuits that include any of these claims can feature claimants seeking claims for medical costs, attorney’s fees, punitive damages, economic or business damages, or compensatory damages.

Even if your client plans to be thorough in their production and distribution, they can still end up making mistakes. And without insurance in place, all that planning and diligent distribution can go nowhere in the event of a claim.

Any business that manufactures even the smallest or seemingly harmless of products can be held responsible for any harm or malfunction. This is why small toy manufacturers and fast food chains had to start putting choking hazard verbiage on their plastic packaging. What’s more, product manufacturers can be blamed for alleged negligence in stream of commerce liability models followed by most state courts.

No matter the product, no matter the industry, no matter the customer-size, having product liability insurance in place will provide and end-to-end solution to keeping legal costs down and reputations intact.

About Genesee General

At Genesee, we strive to provide quality insurance solutions for the Commercial E & S sector. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. Our specialized products include coverages for Transportation, Garage, P & C, Professional, Brokerage Property, Specialty Programs and many more. For more information about our products, we invite you to contact us today at (800) 282- 8755.