From the time the product is manufactured in a factory, wherever that factory is located, to the time you purchase it at your local store and afterward product liability comes into play.
Companies and businesses need to have this insurance, so if sued
they still can remain in business, with higher insurance rates.
The local businessman especially needs this insurance because if he is sued, unlike the giant corporation, he will not have a battery of attorneys at his disposal. He could lose his home in the lawsuit.
A product manufacturing defect such as using lead paint on toys can be a huge issue. The lead is dangerous and this is a design or manufacturing defect.
In the event that a claim is made from (personal injury or property damage) that may or may not have been caused by the products sold or supplied through your business, you are at risk for this liability!
The product might be so poorly constructed that it breaks immediately. The factory and manufacturer will be sued and is in need of liability insurance. The retailer can be sued simultaneously.
There are design defects. You might construct something of the highest quality materials yet it is not designed to work.
Firestone tires, many years back falls into this category. A plane might be made to the highest standards and materials. Yet, the wiring always catches fire, because it was designed to be placed in a certain area. This is another design flaw.
The space shuttle losing its tiles must be a design flaw. Failure to warn is simpler. A well-manufactured motorcycle has no manufacturing defect and no design flaw, but the manufacturer left off the sticker warning that this could be a dangerous machine. This is a failure to warn.
People will sue the manufacturer down to the retail level for any of the above because they were all involved in selling the item.
All need to carry liability insurance.
Unrelated to the above can be opening a soda in the store and a piece of the can or bottle hits the person opening it or someone standing five feet away.
You must have liability insurance even for these contingencies. The flaws might not show up for quite some time after the product is purchased.
Product liability insurance covers a great distance in miles and a long time span to protect the business that is purchasing the insurance policy.
