Product Liability Insurance protects businesses against claims that a product they have supplied has caused injury or damage to a person or their property. Product Liability is part of the Consumer Protection Act 1987, and makes businesses liable for faulty products that they have designed, made, repaired, supplied or sold.
Businesses could face a claim regardless of their role in the product’s life cycle; it could be the manufacturer, or owner of the retail store that sold the item, or someone who has subsequently repaired the product.
Product Liability covers the cost of compensation and any legal fees that may arise from a claim. It covers personal injuries and loss or damage to property caused by a faulty product. It also covers unforeseeable circumstances, for instance if a product’s faults are not identifiable by your quality control system.
You may not be covered if the faulty product is a result of bad workmanship, or if there are financial losses to a business or product that are caused by a faulty product. Product Liability tends to be sold together with Public Liability.
Whilst it is not a legal requirement, you should consider taking out Product Liability Insurance if you intend to start handling products. You may also find that manufacturers, distributors, or retailers you work with require you to have it prior to starting a contract.
You can be held liable for faulty products even if you did not make them and may be liable to pay compensation if:
If you distribute a product, you should be covered by Product Liability if you can show that; the products were faulty when they supplied, include terms for returns, have good quality control and record-keeping systems, or have given adequate safety instructions and warnings if the product is or contains hazardous parts.
You can take out cover from anywhere between £1 million to £10 million. As with many policies, how much Product Liability costs depends on several factors, including:
Due to the diverse nature of industries, businesses, and their respective products, it is important to get the right cover to prevent a heavy financial loss.
Our Brokers have years of experience dealing with a wide variety of businesses and their unique Liability needs. Our access to a multitude of markets and products means that we can tailor policies for each individual business, regardless of size or sector.
We will protect your business, properly.
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