Product Liability Insurance Definition

Product liability is the area of law in which manufacturers distributors suppliers retailers and others who make products available to the public are held responsible for the injuries those products cause.

Product liability insurance definition. Product liability insurance protects a company against claims or suits arising from the company s products whether they were made by the company or sold by them. A small defect could open you up to massive claims so this cover is vitally important for product manufacturers. Product liability insurance also known as products completed operations insurance is a policy that pays for damage or injury caused by a product sold by the policyholder. Product liability insurance covers the cost of compensating anyone who is injured by a faulty product that your business designs manufactures or supplies.

Product liability insurance is intended to cover any compensation payable to a third party and your defence costs the se are the reasonable costs incurred while investigating and defending a covered claim including legal fees experts fees and court costs. Product liability insurance is designed to assist you when your products cause a third party to sustain personal injury or property damage. Definition what does product liability insurance mean. Product liability insurance protection against financial loss arising out of the legal liability incurred by an insured because of injury or damage resulting from the use of a covered product or out of the liability incurred by a contractor after a job is completed completed operations cover.

Product liability insurance is a type of business insurance that can cover the cost of compensation claims if someone is injured or their property is damaged by a product that you ve sold. Product liability insurance is for businesses that manufacture products for sale on the general market. It can also cover the fees that arise from legal action against the policyholder because of their product. Although the word product has broad connotations product liability as an area of law is traditionally limited to products in the form of tangible personal property.

Do i need it. You should consider product liability insurance if your business designs manufactures or supplies a physical product that is sold or given away for free. Product liability insurance protects against lawsuits arising from injury or death caused by. Product liability insurance is insurance for a producer or supplier of goods against injury to third parties or loss of or damage to their property that is caused by a fault in the goods.

If you manufacture or supply goods there s always the possibility that your product could cause damage to a third party that could be property or another person.