Product liability insurance provides cover for compensation claims costs and expenses, for injury, or loss or damage to other people's property, arising out of, or in connection with, any product or completed work for which you are responsible.
Product Liability insurance covers the legal fees and compensation costs if someone makes a claim against you for a faulty product you have supplied them, designed or manufactured. Faulty products may cause damage to property, injury or death.
For example, you sell an electrical item which starts a house fire, destroying someone's living room. Alternatively, you distribute a beauty product that a customer claims caused a dangerous allergic reaction.
In these situations, it is usually the manufacturer that is found to be liable for a faulty product; however, there are other circumstances where you may be required to pay compensation so you should take the necessary precautions.
For instance, your business rebranded the product, your business repaired or refurbished the product, or, most importantly, if the original manufacturer cannot be traced or has gone out of business.
If you are a manufacturer, the chances are your product liability premium will be higher than a retailer or distributor as the risk is much higher. With this in mind, many suppliers will check that you have adequate product liability insurance in place before buying products from you. If this is the case, you may have a contractual obligation to have a minimum level of indemnity.
Give your partners peace of mind when carrying out business with you by making sure you are covered for all eventualities with a thorough product liability policy.
If you are a small business selling your own products, you still need to consider your worst-case scenario to protect your business fully. Fortunately, at Insync we will be able to arrange cover for your business no matter the size.
If a product fault causes property damage, personal injury or even death, under the Consumer Protection Act, manufacturers, designers, distributors, suppliers and retailers could all be held accountable. Therefore, it's vital that before doing business with someone, you ensure that they have adequate cover in place, plus have carried out the relevant safety checks and quality control measures.
Each case is unique and who is liable will depend on independent factors. Even if you are not found to be liable at the end, you could still end up paying legal costs in your own defence.
01200 309 516
Cover for all types of businesses including manufacturers, retailers, online retail, wholesalers, distributors and import or export agents
Full cover up to 100% exports to USA and/or Canada
Cover for imports from China and/or Far East
Full cover for imports from China and/or the Far East
All trades and industries including children’s products, electronics and adult goods
Up to £10,000,000 limit of indemnity (higher limits available on request)
Protection from financial loss and reputational damage
Option to include public and/or employers’ liability
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Basic cover available as standard with your Public Liability Insurance as standard
While products liability is not a legal requirement, many would call it an essential purchase for any business which is supplying, manufacturing, distributing, wholesaling or retailing any products or goods.
Even if you are not manufacturing the products, in the event of a claim, anyone in the supply chain can be brought into a legal dispute, which can prove costly, even if you are not the party at fault.
For most businesses, it would be wise to purchase a combined liability policy. This is where you buy product liability insurance alongside your public liability insurance as, while you might not necessarily be selling products, there is still a certain amount of risk involved in branded merchandise like stationery, USB drives, teddies etc. and any other physical product that you may hand out to clients. This also applies to free samples.
Even if someone if not paying for the product you supply, you may still be held liable for any injury or damage caused. If you give out free samples or welcome gifts to your customers, a basic Product Liability policy is recommended. At Insync, Product Liability comes as standard as part of your Public Liability policy. Be sure to let our team know what products you are giving away when you contact us. Examples of this may include:
Public Liability insurance covers you in the event of third party personal injury, death or property damage that is a result of your business activities. Accidents happen, and most businesses decide to take this cover as standard.
Often, you can purchase products liability insurance alongside your public liability policy in one package as both concerns the same risk. However, these two policies are not interchangeable, and you cannot use a Public Liability policy to respond to a faulty product claim.
Your Product Liability cover only applies to faults that your quality control system could not identify. If you're the manufacturer, it does not excuse poor workmanship and is not a get out of jail free card. If you knowingly supply a hazardous product or do not run the necessary product safety checks, you likely will not be covered.
You may also find yourself liable if you have supplied a product without adequate safety instructions. In this case, this would be another example of not meeting the standard of duty of care to your customers, and you may find yourself uninsured if someone takes legal action.
As with other types of business insurance, when purchasing your product liability cover, you will need to think about the future. Even if you close your business, a compensation claim can be made anytime within three years of using a product, and in some cases, a claim might be valid even years after that. Consider how far in the future a claim might come in, and we can help you plan for that.
In many instances, you can purchase products liability insurance alongside your public liability insurance under a single insurance policy. However, for risks with greater exposure, a standalone product policy can be advantageous.
At Insync, we can access several unique insurance schemes which specifically cater to all types of product-led risks, from electronic devices, vape and e-cigarettes, to food and beverage supplies. Our team of expert insurance advisors will make it their business to help you understand your risk and compare quotations from up to 10 of the UK's leading insurers.
Insync Insurance Solutions Ltd
9 Albany Park, Cabot Lane
Poole, Dorset BH17 7BX
t. 01200 309516
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