Product Liability Insurance
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What does product liability insurance cover?

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Product liability insurance

Product liability insurance protects businesses against the cost of a lawsuit if a customer claims a product the business sold or manufactured led to an injury or property damage.

Product liability insurance can cover:

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Injury caused by a product
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Property damage caused by a product
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Illness caused by a product
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Wrongful death caused by a product

Injury caused by a product

If an item that you sell or manufacture leads to a product injury lawsuit, product liability insurance can cover the cost of hiring an attorney. It would also cover the resulting settlement or court-ordered judgment. Product liability insurance covers lawsuits from customers as well as bystanders.

Example: A coffee shop sells a cup of hot coffee and the customer fails to secure the lid tightly. When he goes to take a drink, he spills hot coffee all over himself and suffers mild burns. The customer files a lawsuit that is eventually dismissed, but the coffee shop still had to pay for legal defense costs.

Property damage caused by a product

Product liability insurance provides coverage when an item you sell or manufacture damages a customer’s property. The damage could be related to a product defect.

Example: A smoke shop sells an e-cigarette to a customer and the battery explodes, causing a small fire in the customer’s home. The customer sues the shop to recoup the cost of a new couch and carpet.

Illness caused by a product

This policy protects against illnesses caused by products sold or manufactured by your business.

Example: A grocery store sells a jar of expired mayonnaise to a customer, who gets sick upon eating it. The customer sues the grocery store over the resulting emergency room visit and missed days of work.

Wrongful death caused by a product

Product liability insurance also covers lawsuits, burial costs, and other expenses related to a death caused by your product.

Example: An electronics store sells an electric scooter to a customer. Due to a product defect, the scooter is unable to stop properly and the customer is hit by a car. The electronics store is held liable for the customer’s death.

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Product liability insurance does not cover:

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Product recall costs
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Damaged products
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Employee injuries
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Accidents involving customers

Product recall costs

Product recall insurance covers the cost of recalling a defective product. Contact an Insureon agent to find out more about this coverage.

Damaged products

The commercial property insurance included in a business owner’s policy protects your own business property from theft and damage. It also covers lost inventory.

Employee injuries

If an employee is injured by a product sold or manufactured by your business, workers’ compensation insurance would cover the employee’s medical bills. It would also cost your legal costs if the employee sues over the injury.

Accidents involving customers

General liability insurance protects against common third-party (non-employee) accidents, including slip-and-fall injuries at your business and customer property damage.

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