Does product liability insurance cover wrongful death suits?
A business could face a wrongful death lawsuit for many reasons, including product defects, unsafe jobsites, and car accidents caused by employees. Product liability insurance is one of several business insurance policies that can protect you from the financial toll of a lawsuit.
What is a wrongful death claim?
A wrongful death claim is a civil lawsuit filed when someone dies due to the negligence, recklessness, or intentional misconduct of a company or its employees. Typically, the surviving family members sue for financial compensation over a death caused by circumstances such as:
- Defective products: When a consumer product made, shipped, or sold by a company causes a customer's death due to a design defect, manufacturing defect, or product flaw.
- Workplace accidents: Fatal jobsite injuries caused by inadequate safety protocols, lack of protective equipment, or OSHA violations.
- Vicarious liability: If an employee causes a fatal car accident while driving for work.
- Premises liability: Deaths caused by unsafe property conditions, lack of security, or poor maintenance, such as slip-and-fall accidents.
- Professional negligence or malpractice: Fatal errors in work performance, such as patient deaths due to negligence by hospital staff.
What types of damages are involved in a wrongful death claim?
Wrongful death damages compensate the surviving family and the deceased's estate for the financial and emotional distress caused by a tragedy. These damages typically fall into one of three categories:
- Economic damages: Surviving family members can sue for lost wages, loss of benefits, including health insurance, medical expenses, and funeral costs.
- Non-economic damages: Survivors can sue for emotional pain and suffering, loss of companionship, and loss of future enjoyment of life.
- Punitive damages: The court can award punitive damages to punish liable parties for particularly reckless or intentional behavior and to deter that conduct in the future.
Does insurance cover wrongful death?
Insurance typically covers wrongful death claims, provided that the at-fault party has the right coverage for the cause of the fatality. Most personal insurance policies, including car insurance, health insurance, and homeowner's insurance, cover wrongful death lawsuits brought against an individual.
For businesses, here are some of the insurance policies that can cover wrongful death claims:
- Product liability insurance covers businesses that make, ship, or sell products that cause customer bodily injury and wrongful death, paying medical bills and legal representation costs.
- Commercial auto insurance covers deaths caused by company vehicles and employees driving on behalf of the business, including delivery drivers and trucking companies.
- Professional liability insurance, also called errors and omissions (E&O) insurance or malpractice insurance, covers fatalities resulting from negligent professional services, advice, or failure to correctly perform the duties of doctors, nurses, and engineers.
How does product liability insurance protect against wrongful death claims?
Product liability insurance protects against wrongful death claims by paying for:
- Attorney's fees
- Economic and non-economic damages
- Settlement negotiations
- Expert witness fees and miscellaneous court costs
It's important to note that some product liability policies don't cover punitive or statutory damages, and others cap the amount of punitive damages they'll cover. These damages can be catastrophic, so it's crucial that you check your policy terms or ask your insurance agent if punitive damages are covered in your policy.
What can cause a product liability lawsuit over wrongful death?
Product liability lawsuits for wrongful death can occur when a defective or unreasonably dangerous product causes a customer's death. Under product liability law, businesses can be held responsible for:
- Design and manufacturing defects
- Marketing defects, such as inadequate safety warnings that lead to product misuse
- Unforeseen fatal accidents caused by a product
Under strict liability, a company can be held financially responsible for a defective product even without proof of negligence, making product liability insurance an essential protection for any business that makes, distributes, or sells products.
Who could be affected by a wrongful death lawsuit?
From makers to sellers, any business in the supply chain could face a wrongful death lawsuit, including:
For example, a surgeon implants a malfunctioning pacemaker, leading to a patient's death. The device manufacturer and the distributor who supplied the pacemaker could be sued for product liability, wrongful death over a defective medical device, and the hospital could be sued for medical malpractice. This is why many businesses need robust liability coverage to protect against their specific exposures.
How a wrongful death lawsuit could impact your small business
A wrongful death lawsuit can have a significant impact on your business in many ways, including:
- Substantial legal defense and settlement expenses
- Negative publicity and reputational damage
- Product recall costs
These expenses can be financially catastrophic for a small business, making insurance a crucial part of your risk management strategy.
Keep in mind, wrongful death claims are subject to a statute of limitations, setting a legal deadline for a lawsuit to be filed. This window is typically between one and three years, although it varies by state.
Top professions that need product liability insurance
How much is the average wrongful death settlement?
There's no verified national average for wrongful death settlements, as every case is different and private agreements aren't tracked by the government. Many personal injury law firms across the country report a typical settlement range of $500,000 to $1 million, but actual settlement amounts vary widely.
For example, in 2025, an Illinois family reached a $5 million wrongful death settlement after a trucking company's driver rear-ended their vehicle, while a Colorado jury awarded $205 million (later reduced to $116 million) to the family of a 6-year-old girl who died on a theme park ride.
How do I get product liability insurance?
Product liability insurance is typically included with general liability insurance. For quick, affordable coverage, complete Insureon's easy online application and compare free online quotes from top-rated insurance providers. You can also speak to one of our licensed insurance agents about finding the right policies for your small business.
Once you select your policy, you can begin coverage and get your certificate of insurance (COI) in less than 24 hours.
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