What is Product Liability Insurance?
Product Liability Insurance is usually included as part of a Public Liability Insurance program. It provides specific coverage for businesses who supply products to their customers or to members of the public.
Small business owners have a responsibility to their customers, employees, suppliers and the greater community. Product Liability Insurance covers you in case your product or the products you sell cause accidents, damages, injuries, or other types of losses to someone who buys or uses that product. Specifically, it helps protect your business by ensuring that if the product you produced or supplied results in legal action, you don’t have to pay any legal or court costs.
Product Liability Insurance can help your company survive the unexpected, with minimum losses.
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What Risks May Product Liability Insurance Cover?
Just as every business is unique, so are the risks that they face. In the case of Product Liability, these risks can be widespread, for example:
- A DIY enthusiast buys a corrosive paint-removing chemical without adequate instructions for safe handling and use. As a result he uses it incorrectly, injures himself and sues the company.
- A faulty line of electric blankets can electrocute the user when turned on high. Several customers are injured as a result of the product defects, and take on a class action suit against the manufacturer.
- A family buys a swing set with a cracked chain. Without noticing, they let their children play on it and one of them is hospitalised and the family takes legal action against the company.
- A tainted batch of cough syrup contains a poisonous substance, which harms several users. As a result, the manufacturer is on the receiving end of several compensation claims.
What are the Key Things that May be Covered in a Product Liability Insurance Policy?
The need for Product Liability Insurance cover is very broad. As a business, if you sell, supply or deliver goods, even in the form of repair or service, you may be liable if your products cause:
- Death or injury to anyone who comes into contact with your product
- Property damage caused by your product
- Nervous shock, such as emotional distress or a recognised psychiatric illness.
Your business may be liable for compensation if:
- The name or logo of your business is on the product
- Your business repairs, refurbishes or changes a product
- You cannot identify the manufacturer of the product, or if they have gone out of business.
Public & Product Liability insurance policies are specialised fields of insurance. Due to the potentially onerous legal liability exposures, Product Liability policy wordings are very technical to ensure you are properly covered. As a result, it can be difficult to determine what Product Liability insurance you need. The more comprehensive the cover you choose, the more expensive your insurance premium is likely to be.
PSC Direct have access to a range of different policy wordings. Through our expertise and experience we have analysed each to determine what cover your business is likely to need. While the risk exposures might be different from business to business, the same insurance principles apply and mean we can use our experience of dealing with hundreds of businesses similar to yours to obtain the broadest liability cover to protect against the specific risks unique to your business.
Who Needs Product Liability Insurance?
Almost all businesses need some form of Product Liability Insurance. It is critical for any business that supplies or sells products, no matter how safe or simple they appear to be. Every product has the potential for something to go wrong from misuse or an accident.
Product Liability Insurance is an important part of any business insurance policy as claims against your business for personal injury or property can be very expensive and cripple your business. Worse, even if you’re not considered at fault, you can still run up significant legal bills from a court case.
Product Liability Insurance protects your business by providing cover against claims and the costs associated with legal defence or court case.
How PSC Direct Works for You
As specialist small business insurance brokers, PSC Direct uses our considerable experience to provide multiple quotes for you. Combining our expertise insuring thousands of other similar businesses with our detailed database of insurers and insurance products; we’re best placed to advise you on the right insurance for your business.
We have strong relationships with the leading underwriting agencies and insurance companies. We can source the most appropriate business insurance policy for you, covering you for what you really need, at the right price.
We can help sole practitioners, small, medium and large businesses protect the businesses you are growing and ensure your assets are covered in the event that disaster strikes.
With our strong relationships to a broad range of highly-rated insurers we are able to advise you on business insurance, professional indemnity insurance, and public liability insurance specifically tailored to meet the risk exposure of your business.
We can also provide advice on a range of additional insurance policies and cover that can affect your business and make sure you have the right insurance at the right price.
- 72% of Australian businesses fail after experiencing a major loss.
The right business insurance will ensure you are not one of them.
While good insurance covers you for most things – Professional Indemnity, Professional Liability and Property, great insurance covers you for the specific risks that your business faces. We understand that every business is unique and you need a policy that addresses the specifics. We make sure that when you have a claim that’s out of the ordinary and complicated, you’re covered.