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Product Liability Insurance Broker: Financial Protection for the Modern Supply Chain
- Supply Chain Resilience: We secure your balance sheet against the catastrophic costs of product recalls
- Policies can cover not just manufacturing defects, but design failures and inadequate warning claims
- A-Rated London Market Capacity: Access specialist underwriters in the London market
Navigating Product Safety Risks & Liability
The UK’s evolving product safety framework has been influenced by updates to the General Product Safety Regulation (GPSR) which has increased accountability across the entire supply chain.
Businesses must now demonstrate enhanced traceability, product testing, and compliance documentation. 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.
Suppliers also become Targets
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Any business involved in the manufacturing, distribution, sale, or supply of physical goods should consider product liability insurance. 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.
It’s important to understand that if the claimant can not obtain financial compensation from the manufacturer, then as the local supplier you could find yourself wholly responsible for any harm the product causes.
AI & Smart Device Liability
Modern products increasingly combine hardware with embedded software, AI, and connectivity. A coding error, firmware failure, or IoT malfunction can now result in physical injury or property damage, which are not traditionally covered because these would be considered design or specification errors and should be covered under Professional Indemnity Insurance.
If you provide hardware with embedded software, AI or connectivity, it is recommended you combine Products Liability, with Professional Indemnity and Cyber Liability Insurance under once package policy to avoid any coverage gaps.
Specialist Tech & Science Sector Expertise
IT Hardware and Software
Product liability risk within IT hardware and software has evolved, as physical devices and embedded systems become increasingly interconnected. For businesses developing or distributing smart devices, servers, or integrated systems, the key challenge lies in the overlap between digital failure and physical consequence, requiring carefully structured cover that responds when technology driven faults.
MedTech & Life Sciences
The MedTech and Life Sciences sector carries some of the highest-stakes product liability exposures. Medical devices, diagnostic equipment, and clinical products are subject to strict regulatory oversight, and any failure can result in serious injury, long-term health implications, or even fatality.
Claims in this space are often complex, involving clinical evidence, regulatory compliance, and significant damages. With heightened scrutiny around product efficacy, safety data, and post-market surveillance means businesses must ensure their liability cover reflects both the severity and complexity of these risks.
Sustainable Energy & Battery Technology
Issues such as thermal runaway, fire hazards, and disposal or recycling failures can lead to significant property damage and safety concerns. In addition, the scale of deployment (e.g. in homes, vehicles, or commercial installations) increases the potential for widespread loss from a single defect.
Product liability insurance for this sector must be tailored to address these unique exposures, ensuring protection keeps pace with innovation.
Evolving Regulation and Liabilities
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.
Strict Liability
Product liability operates on a strict liability basis. This means you can be held responsible for a defective product regardless of fault. Even if the issue originates from a third-party supplier, you may still be liable as the importer, distributor, or brand owner.
Product Safety
Liabilities for products are 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.
Global Supply Chain
Different jurisdictions operate under varying manufacturing and safety standards. A component produced overseas may not meet UK or EU regulatory expectations, even if it appears compliant locally. This inconsistency creates exposure where defects arise due to substandard materials or processes outside your direct control.
Insurers are increasingly cautious where there is poor documentation, unclear sourcing, or limited quality control, as this increases both the likelihood and severity of claims.
Challenging Liability Exposures
US Exposure
For UK-based manufacturers, distributors, and exporters, the USA and Canada market increases the potential for higher frequency and severity of claims. Aggressive litigation, higher damages, and complex legal frameworks means higher risk.
If you export to these markets, your coverage should include cover for the USA and Canada which is typically otherwise excluded under most standard policies.
Childrens Toys
Children are considered a high-risk and protected consumer group. They are less aware of danger, more likely to misuse products, and unable to follow instructions in the same way as adults. As a result, courts and regulators apply a much higher duty of care to manufacturers and suppliers, increasing the likelihood of liability if something goes wrong.
Toys are subject to some of the most stringent safety regulations in the UK and EU, including requirements around materials, design, labelling, and testing. Manufacturers must not only design toys to be safe when used correctly, but also anticipate how children might misuse them. Small detachable parts, sharp edges, toxic materials, or poor construction can all lead to injury.
Sector Specific Guides
Underwriting Product Liability Risk
Insurers will consider a number of factors when considering to offer your business product liability insurance. The type of products being produced, where the materials are being sourced, where you are sending finished goods, sufficient warning labels, due diligence on suppliers, and monitoring of the safety of all goods manufactured or sold.
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.
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.
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.
Perishable
Perishable goods such as food or medication can easily be destroyed in transit or be ineffective once sold if not stored correctly.
Expert Placement with a Specialist Broker
As a specialist broker we can ensure your coverage is structured correctly to provide end-to-end protection from operational risk through to post-sale product exposure.
One of the most common risks businesses face is the “grey area” between product liability, professional indemnity, and public liability insurance. We specialise in aligning these policies to ensure seamless protection.
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Access to A-Rated Public & Product Liability Insurers
Testimonials
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Frequently Asked
Questions
Are product guarantees covered?
Product guarantees, warranties, refunds, replacement costs, and contractual promises are not automatically covered under Product Liability Insurance. Businesses should not assume warranty obligations are insured unless they have been explicitly told otherwise.
Why do USA and Canada sales affect Product Liability premiums?
North American claims can involve higher defence costs, class actions, broader discovery, larger settlements, and more aggressive litigation. Insurers therefore treat USA and Canada exposure as a significant underwriting factor.
Are importers exposed to Product Liability claims?
Yes. Importers can face significant exposure because they may be treated as a key party responsible for placing products on the UK market. This is particularly important where the overseas manufacturer has no UK presence.