Product Liability Insurance
If you design, manufacture, or supply goods you should consider product liability
Do you need product liability insurance?
Any business involved in the manufacturing, distribution, sale, or supply of physical goods should consider product liability insurance. It provides financial protection to businesses from claims arising from bodily injury and property damage resulting from product defects. It will cover legal costs and any compensation awards if you are found to have a legal liability.
It's important to note - any business who supplies goods are responsible for their safety. The level of responsibility will depend on whether you are involved in the manufacture of the products, or whether you are involved with the distribution. However, if the claimant can not obtain financial compensation, then as the local distributer you could find youself wholly responsible for any harm the product causes.
Product liability cover is typically combined with public liability insurance and provided under a package policy designed for your industry sector. To obtain your product liability insurance quote, complete our digital onboarding process or give us a call on 0345 625 0711
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What is product liability insurance?
Product liability insurance is a type of cover designed to protect businesses from claims related to injuries or damages caused by faulty products they manufacture, sell, supply, or distribute. For example, if an item supplied causes physical harm to a customer or damages their belongings, the insurance would help cover legal costs and the compensation claim.
Design defects occur when a product’s design is inherently dangerous or faulty, making it unsafe even if manufactured correctly. Whereas, manufacturing defects are accidental issues that occur during the production process leading to a faulty product. If an item with a defect injures someone or damages property, the cover can provide protection aginst the claim.
Items sold to consumers and commercial customers under The General Product Safety Regulations 2005 are required to be safe and failing to meet your responsibilities can have serious consequences. Manufacturers, distributors, suppliers, and retailers can all be held liable for damage, personal injury or death for providing defective products.
Products liability insurance cover
Although not a legal requirement in the UK, products liability cover should be considered by every business that manufactures, designs, distributes or supplies goods to customers. The cover is typically offered under a commercial combined insurance policy and packaged with a number of other covers.
Manufacturing
Wholesale & Warehouse
Retailers & Shops
With Get Indemnity™ product liability insurance quotes start from £224 per year or £18.66 per month
Talk to an expert about your business and the goods that you sell to ensure you are protectedWhich activities carry a higher product liability risk?
Type of products
Different tangible items will carry a greater degree of risk. For example, goods designed for children are challenging because of the high awards of damages.
Turnover
The company's turnover will be indicative of the insurer's exposure, a greater volume of sales increases the potential incidence of bodily injury.
USA or Canada
Items sent to the USA or Canada can increase your liability cost due to the size of the compensation awarded provided by the courts.
Produced in Asia
Materials or goods produced in Asia and other countries can restrict your ability to hold the supplier to account and increase your insurance cost.
Safety critical
Safety critical items such as toys, electrical goods, machinery, fireworks, food, and medicines carry an increased risk should they fail when being used.
Perishable
Perishable goods such as food or medication can easily be destroyed in transit or be ineffective once sold if not stored correctly.
Why product liability insurance is important?
Product Safety
Liabilities for products is governed by legislation and regulation. Items sold to consumers and commercial customers under The General Product Safety Regulations 2005 are required to be 'safe'. Potential liable claims can arise from anyone injured or who has suffered damage to property.
Strict Liability
Many consumer protection laws rely on 'strict liability', where it does not matter if the person accused did not intend to break the law. To use this defence, they must satisfactorily prove all reasonable precautions were taken to avoid an offence being committed. Failing to meet your responsibilities can have serious consequences.
Who is liable for damage caused by a defective product?
Under the Consumer Protection Act 1987, manufacturers, distributors, suppliers, and retailers can all be held liable for damage, personal injury or death for providing defective goods to consumers. Claims under the Act are generally brought against the product ‘producer’, which is generally regarded as the business that has their name on the product, however there can be a number of exceptions. The most common exception is if the items have been imported to the UK from outside of the EU, the importer is then regarded as the producer, however, there are a number of other circumstances.
Additional business insurance covers
Public liability and product liability insurance is always purchased together for commercial activities, insurers will not offer cover for injury or property damage from a faultly item in isolation. However there maybe additional policy covers, such as cargo insurance that your business should also consider.
Professional indemnity
If you also design products, you should consider professional indemnity to protect against demands for compensation.