Product liability insurance is essential coverage for businesses that manufacture, distribute, or sell products. It provides protection against claims arising from bodily injury, property damage, and other losses caused by a defective product. If you’re a business owner, it’s important to consider whether your operations require this type of insurance and what it covers. In this article, we’ll discuss what product liability insurance covers, how much it costs, and how to obtain it.
What Product Liability Insurance Covers
Product liability insurance provides coverage for claims related to defective products. This includes products that cause bodily injury, property damage, or other losses. For example, if a customer purchases a product from your business that is defective and causes them harm, they may file a lawsuit against you. Product liability insurance would cover the costs of defending against the claim and paying damages if you are found liable.
Product liability insurance typically covers the following:
- Manufacturing or Production Flaws: These are defects that occur during the manufacturing or production process. Examples include a missing component, improper assembly, or contaminated product.
- Design Defects: These are defects that occur due to a flaw in the design of the product. For example, if a piece of furniture collapses due to a design flaw, resulting in injury to a customer.
- Warning or Instruction Defects: These are defects that occur due to a failure to warn or provide adequate instructions about the product’s use. For example, if a toy does not come with a warning that it is a choking hazard for children under the age of three, and a child chokes on it.
How Much Does Product Liability Insurance Cost?
The cost of product liability insurance varies depending on various factors, such as the nature of your business, the types of products you sell, the amount of coverage you need, and your claims history. On average, small businesses can expect to pay between $400 and $1,500 per year for product liability insurance.
Businesses that sell high-risk products or operate in high-risk industries such as medical devices, pharmaceuticals, or food products may have higher premiums. Additionally, businesses with a history of claims or lawsuits may also face higher premiums.
How To Get Product Liability Insurance
If you’re interested in obtaining product liability insurance, the first step is to speak with an insurance agent or broker who specializes in this type of coverage. They can help you assess your risk and determine the appropriate level of coverage for your business.
When shopping for product liability insurance, be sure to compare policies from multiple insurance companies. Look for policies that offer comprehensive coverage at a reasonable cost and that have a reputation for providing excellent customer service.
Get the Best Product Liability Insurance at Massive Insurance & Financial Services
At Massive Insurance & Financial Services, we specialize in providing insurance solutions for businesses of all sizes. Our team of experienced agents can help you assess your risk and determine the appropriate level of coverage for your business. Contact us today to learn more about how we can help you protect your business with product liability insurance.