Product Liability Insurance

Product liability insurance protects manufacturers, distributors, and retailers from claims of injury or damage caused by their products.

If you make, sell, or distribute products — you're exposed.

Product liability insurance protects your business from claims that a product you manufactured, distributed, or sold caused injury or property damage to a consumer. It covers legal defense, settlements, and judgments. Because any party in the distribution chain can be held liable, you may face claims even when the defect originated with a supplier or manufacturer. Product liability coverage is often included in a commercial general liability (CGL) policy, though standalone policies are available for higher-risk operations.

What Product Liability Insurance Covers

Manufacturing Defects

Product liability covers claims arising from defects introduced during the manufacturing process, including legal defense and damages.

Design Defects

Coverage protects against claims that the product's design made it unreasonably dangerous, even if it was built to specification.

Failure to Warn

Product liability covers claims that inadequate labeling, warnings, or instructions contributed to the injury.

Who Needs This Coverage?

Any business in the product supply chain — manufacturers, distributors, wholesalers, and retailers. If a product passes through your hands, you can be held liable.

What Happens Without It

A customer is hospitalized after an allergic reaction to a food product you manufactured. They sue for $500,000 in medical bills and pain and suffering. Product liability lawsuits are among the most expensive in commercial insurance. Without coverage, a single claim can exceed your business's total assets.

Real-World Example

A small electronics company sells a phone charger that overheats and damages a customer's laptop. The customer sues for the cost of the laptop plus consequential damages. Product liability insurance covers the legal defense, the laptop replacement, and the settlement — preventing a $50,000 loss from becoming a business-ending event.

RISKX — Commercial Insurance Agency | Licensed in All 50 States | (800) 400-8398 | [email protected]