Product Liability

Any business that is involved in producing a product; be it making, selling or repairing a product should have product liability cover.  It is not compulsory in most industries but many contractors insist that businesses have it.  It covers an serious problems of defects that may surface during the use of the product, and the claims that can arise from these problems.

Product liability insurance covers any defects in products that may arise from use, causing injury or damage due to the manufacture or design of the product, even if there is no negligence.  This does not cover a business that makes an inferior product or supplies bad services.  A business must still take statutory care in its business operations, and your insurer may require you to adhere to certain standards such as properly trained staff and proper, well maintained equipment.  Having product liability does not relieve a business from these standards.

Product liability insurance covers businesses against claims made by members of the public who have suffered injury or damage as a result of a product that may have been manufactured, supplied or repaired by a business.  For example, a ladder manufacturer will be held liable if a faulty ladder design causes falls and injuries.  A business might be held liable for any damages or injury even if there is no negligence in the manufacture, retail or repair of the product.

Claims made regarding the quality of service or manufacture, safety, spoilage and indemnity costs such as legal expenses or medical bills are all normally covered under a product liability insurance policy.  Cover is subject to standard policy terms and conditions.

Typical levels of product liability are £1,000,000, £2,000,000 and £5,000,000.  Product liability insurance is expensive, as it is a specialist market, but the costs are much smaller than the costs faced in the event of a claim or court case, or the reputation damage faced in the event of a claim.  If a case were to go against a business, costs can run into the hundreds of thousands, sometimes even millions.