Product Liability Insurance Coverage: What Should You Look For?

Product liability is one of the most common nightmares of distributors, sellers, lease-granters, and manufacturers of products. These days, there is hardly any company that has been able to escape product liability lawsuits.

These lawsuits that involve product liability may drag not only the finances of your company downhill, but they also jeopardize the reputation of your company! So, it is always better to avoid such lawsuits and take extra caution to combat or tackle them well.

To prepare yourself completely, you need to have product liability insurance.

Without having the right amount of information and insight into the types of problems that can come up, however, you may end up making flawed decisions. So, let’s analyze the types of liabilities in more detail now. Most of you must have been aware of the two basic categories or types of liabilities: ‘fault’ and ‘strict’. Here, in this article, we are going to discuss both types in more detail.

The fault-liability type is more about when a customer or buyer suffers injury because of the damage inflicted by the flawed product. Moreover, here the customer brings up the objection that the product has been flawed, and company omitted or misrepresented the information before selling it. Here, the distributor can be held responsible for fraud or intentional misrepresentation.

Moreover, if the product has been assembled wrongly or tested inappropriately or failed due to lack of care, the distributor can be charged with negligence. The second type of product liability is more complex and involves situations that do not include any faults. In this liability type, the charge arises due to inappropriate instructions.

Product liability insurance can help you avoid all the undesirable conditions due to liability issues.

When you want to cover yourself with product liability insurance for small business, you will need to check with your agent that provides your business insurance coverage to see if it is already included in your policy. You need to also be aware of the exact nature of that insurance as to what is covered. When you purchase, give your agent the most accurate information that you can about what kind of product your company makes and how much is produced during manufacturing.

This will affect the price of your employer’s liability coverage, but being honest avoids problems later on if there is a suit and it keeps you from being penalized because you did not purchase enough coverage.

If you have narrowed it down to a few insurers, make sure that you compare quotes and are aware of each company’s reputation. This can be critical when you are faced with court action and need a solid insurance company behind you.

If you follow these initial steps, you will have a great start on being properly protected.

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Gemma-Leigh Garner

I'm a published author and direct response copywriter for a Web company in Austin, TX but also do freelance writing on the side as well.