Product Liability


You’re a hardworking business owner and you have to tackle so many things at once. You’re responsible for the quality of each and every product you manufacture and sell. If any of those products turn out to be faulty or are poorly advertised, resulting in injury or damages, your business may be held accountable. The resulting financial consequences could be astronomical, and not every business has the financial backing to recover from such a loss.

With liability, your company assumes responsibility for damages to a third-party in the perspective of the law. No business is invulnerable to being held liable, whether that business is a massive conglomerate or a tiny startup that’s only just beginning to stretch its wings. Even entrepreneurs could face colossal lawsuit costs if they’re not careful.

It just takes one mistake. It’s better to be cautious than wind up without a business to run. Even if you don’t think your business has done anything wrong, lawsuits can happen if a loss is perceived and a third-party believes your business is to blame. Protect yourself with product liability insurance. Any company that manufactures, designs, distributes, or even markets a product should have this vital form of coverage. Discuss its benefits with a Hitchings Insurance representative today.

What is Product Liability Insurance?

Product liability insurance or product liability insurance is coverage designed to protect your business from the financial consequences if an issue is found with a product where it is found to cause bodily injury or property damage to a third party. The business owners who made, sold, or marketed this product could be found liable for the damages (so long as the source can be traced back to them.)

In layman’s terms, a products’ liability insurance policy will typically include:

Bodily Injury Lawsuits

If an incident occurs where a product you have manufactured, distributed, or designed causes injury to a third-party, your product liability insurance may cover the cost of any consequential lawsuit and/or the medical and loss of income costs to the injured party/ies.

Property Damage Lawsuits

In the event your product causes property damage to a third-party, your product liability insurance coverage may include compensation for repairs/replacement costs and/or legal defense costs if a lawsuit arises.

Marketing Defect

If your product is marketed with incorrect safety warnings (or has no safety warnings), incorrect labelling, or has insufficient instructions, and you are sued as a result for this misinformation, your product liability insurance may cover any consequential costs.

Design or Manufacturing Defect

If something goes wrong with the product, either before it is made (during design stages) or while it is being made (being assembled wrong, missing a piece) then your coverage may cover any costs arising from a product claim.

It may not seem like it from a first glance, but product insurance claims can be rather expensive in nature, and it’s not in your business’ best interest to go about its daily operations thinking that it isn’t the type of company to be faced with a lawsuit. Lawsuits happen daily, and to all kinds of businesses. Even smaller claims can cost your business tens of thousands of dollars, and it’s vital to transfer that weight of risk where possible by purchasing insurance.

What are some examples of claims that would be covered by product liability insurance?

Product liability insurance, not to be mistaken for product recall insurance, covers common issues that customers and third parties might encounter which could result in product insurance claims. Those include products that cause property damage, products that cause bodily injury to the customer, and sickness or illness caused by food or beverage products. There can be anything causing these issues, including manufacturing defect, design defect, and marketing defect.

What industries may need product liability insurance?

It’s commonly misunderstood that small businesses don’t require insurance or it’s too expensive for small businesses to carry insurance. The reality is this: no matter whether you’re a boutique selling floral arrangements or a baker, you have a product that exposes you to the risk of product liability claims, and those are far more expensive than the cost of insurance. As soon as you begin selling your product to the public, you could be exposed to product liability lawsuits. They are expensive, time-consuming, and can risk all your hard work.

Here are a few of the businesses that may benefit from product liability insurance:

  • Pet supplies stores
  • Bakeries
  • Cafes
  • Restaurants
  • Wholesalers
  • Clothing shops
  • Gift shops
  • …and more

It’s not just businesses that sell to customers who may face risks, either. Product liability can be traced back to you even if you’re a business-to-business company, including companies that do software developing, supply equipment, supply raw materials, or create websites. If the defect/issue can be traced back to you, you can be held liable – even if you don’t sell directly to consumers.

Get a Product Liability Insurance Quote with Hitchings Insurance

We’re a third-generation, family-owned, full-service insurance brokerage that is beyond eager to serve its clients products’ liability insurance that works well to address the kind of risks that your business may face. We are confident and passionate when we help our neighboring businesses, and we believe that part of our mission is helping retail and manufacturers get the best product liability insurance.

No two businesses are alike, so their insurance coverage shouldn’t be the same, either. We believe in the importance of customizing policies to suit the individual business, rather than just settling for the easiest “cookie-cutter” policy. We consider budgets, risks, industries, and more. We work with a selection of top-tier regional and national insurance companies so you can choose between multiple options.

Begin today with your products’ liability insurance and get a free quote.