Business Advice, Insurance, Liability & Indemnity

What is Product Liability Insurance and Do You Need It?

Business Advice | 1 February 2023 | 1 year ago

There is no knowing when something will go wrong with one of your products, and unfortunately accidents do happen. If someone is injured because of your product and they sue you, product liability insurance is there to help with the financial burden. Below, we have taken a look at product liability insurance and whether you need it for your business.

What is Product Liability Insurance?

There are a lot of different types of insurance available to businesses, and one of these is product liability insurance. Product liability insurance covers the cost of compensation claims if someone is injured or something is damaged as a result of one of your products. If you sell a product and someone ends up injured, or their personal property is damaged, product liability insurance is there to help cover the financial repercussions of someone making a claim against you. Without product liability insurance, you will have to cover the costs yourself.

What Does Product Liability Insurance Cover?

You are likely to be liable for the legal fees and compensation costs if someone makes a claim against you for injury or damage caused by one of your products. You could even find yourself liable if you haven’t manufactured the product, but you have repaired or refurbished it in some way. This could be because a toy has injured a child or because a piece of kitchen equipment was faulty and caused damage in the home. Regardless of the type of products that you sell, personal injury and damage is always a possibility.

Do You Need Product Liability Insurance?

Technically, product liability insurance is not a legal requirement in the UK, and therefore you don’t need it. However, it’s likely that a lot of manufacturers and retailers will require you to be covered in some way. Though you might take all of the necessary precautions to ensure that your products are safe, accidents can happen and things can go wrong. If someone makes a claim against you and you are liable to pay, you could find yourself out of pocket and struggling without product liability insurance.

The amount you can be sued for can vary hugely in a product liability case, but you should expect a large figure if serious injury is caused. This is something that a lot of businesses will struggle to pay, but product liability insurance is there to help cover the costs.

Getting Product Liability Insurance

It’s important to find product liability insurance that offers a good level of cover, taking the type of products you sell into account. Before choosing your product liability insurance, consider all of your options and types of cover. Though some might be more expensive than others, they are likely to provide a better level of cover.

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