Coverage Guide
Product Liability Insurance
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 It Covers.
Manufacturing Defects
The Risk
A product leaves your facility with a flaw that causes injury. A batch of supplements is contaminated, or a power tool has a faulty safety switch.
The Solution
Product liability covers claims arising from defects introduced during the manufacturing process, including legal defense and damages.
Design Defects
The Risk
A product is manufactured correctly but its design is inherently dangerous. A children's toy has small parts that pose a choking hazard.
The Solution
Coverage protects against claims that the product's design made it unreasonably dangerous, even if it was built to specification.
Failure to Warn
The Risk
A consumer is injured because your product lacked adequate warnings or instructions. A cleaning chemical causes burns because the label didn't specify proper ventilation.
The Solution
Product liability covers claims that inadequate labeling, warnings, or instructions contributed to the injury.
Who Needs This?
Any business in the product supply chain — manufacturers, distributors, wholesalers, and retailers. If a product passes through your hands, you can be held liable.
- Manufacturers of consumer goods
- Food producers and processors
- Retailers and e-commerce sellers
- Importers and distributors
What Happens Without It?
Scenario
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.
Consequence
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.
Situation
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.
Outcome With Coverage
Product liability insurance covers the legal defense, the laptop replacement, and the settlement — preventing a $50,000 loss from becoming a business-ending event.
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Related Coverages.
Often paired with Product Liability for comprehensive protection.
See It in Action.
Real-world scenarios where Product Liability made the difference.
A Salon Owner's $180K Professional Liability Defense
A client sued a salon for $180K after a chemical treatment allegedly caused permanent hair loss. Professional liability covered the full defense.
Read Case StudyHow a Manufacturer Survived a $1.4M Product Liability Recall
A design flaw in commercial kitchen equipment caused burn injuries at three restaurants. Product liability covered the $1.4M recall and settlement costs.
Read Case StudyDisclaimer: The coverage descriptions on this page are general summaries intended for informational purposes only. They do not constitute insurance advice, nor do they modify, amend, or supplement any insurance policy. Actual policy terms, conditions, exclusions, and limitations vary by carrier, state, and individual risk profile. Please refer to your specific policy documents for complete details, or contact us to discuss your coverage needs with a licensed agent.