Product Liability Insurance
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How do I react to a product liability bodily injury?

A bodily injury caused by a defective product can easily turn into a lawsuit. Learn the steps you need to take to protect your business.

When is a bodily injury a product liability claim?

A bodily injury means physical damage to any part of a person's body. If a person breaks a leg after falling off a ladder, they've suffered a bodily injury.

When a consumer good causes the injury, it can result in a product liability claim. For example, if someone fell off the ladder because it failed to lock, then the bodily injury could be a product liability issue if one of the following statements is true:

The ladder's designer made a mistake. A design defect must exist when the product is purchased. Perhaps the designer made a ladder that could only hold a small child, or the ladder was not designed with a lock system to keep the legs in place. Both errors could constitute defective design, making the designer potentially liable for the resulting bodily injury.

The ladder's manufacturer made a mistake. A manufacturing defect would occur during the ladder's production. That includes any errors that happened while manufacturing and assembling the ladder or when choosing the product's materials.

There was a mistake in the instructions or safety labels. Did the ladder need a warning limiting use to people who weigh less than 200 pounds? Are the locking instructions unclear? The retailer, manufacturer, or distributor can be liable for injuries if they fail to warn consumers about potential dangers.

Because mistakes can happen at any point in the distribution chain, any party can be held responsible for injuries caused by a defective product. Some states even have strict liability laws that make it easier for a plaintiff to win these lawsuits. In those states, your business can be liable for bodily injuries even if you did everything in your power to minimize the chance of defects.

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What should I do if a customer files a bodily injury lawsuit against my business?

When a product you make or sell physically hurts someone, you have to act quickly. The product liability coverage in your general liability insurance can help cover the cost of a product liability claim over bodily injuries, but it won't:

You must complete these steps to defend your business.

1. Contact your insurance provider

When you receive a bodily injury complaint from anyone who isn't an employee, get in touch with your general liability insurance provider right away. Your general liability policy can cover third-party injuries on your property (such as a slip-and-fall accident), and if it has product liability coverage, it can also cover bodily injuries caused by items that your business makes or sells. The sooner you contact your insurer, the sooner it can begin to investigate the claim.

2. Notify the U.S. Consumer Product Safety Commission

If you get a product liability lawsuit notice, report it to the CPSC immediately. Manufacturers, importers, distributors, and retailers are obligated to report certain types of lawsuits, but they're also obligated to report products that are potentially defective, inherently risky, or noncompliant.

Contacting the CPSC immediately may save you hefty fines, but the CPSC may also find ways to help you reduce the likelihood of a recall.

3. Identify the source of the defect

Figure out what went wrong and when. Identifying which step in the process caused the defect can help you determine your business's exposure.

Even if your business isn't the reason for your customer's bodily injury, you can use the information to inform your next move. Get more tips for defending your business here.

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