The Importance of Making Sure You Have Product Liability Insurance Coverage

Do you sell products that could result in a claim against your company? If so any claim resulting from such a scenario would also be considered a claim under product liability. How will my business benefit from a products liability policy?

Well, the simple answer is that in the event of a claim you don’t have to worry about losing money.

Claims for bodily injury are notoriously unpredictable as are claims for damage to property. Look at the news and we see million dollar awards for such cases every day.

Furthermore, these claims often involve product lawsuits which can be both expensive and extremely stressful. It is much better to get the protection you need purchase getting an insurance policy than it is to deal with the consequences of not having a policy in place.

So, It is a very good idea for each and every business to have business product liability insurance. This not only protects themselves and their company, but it also provides protection for the consumers themselves. This type of insurance protects the business from all sides.

Mainly, it is liability insurance protection against claims that consumers make concerning their product.

This includes the manufacturing and selling of foods, medicines, and other goods made available to the public.

It will also cover both the manufacturer’s and seller’s liability for losses and injuries to a buyer, user, or bystander caused by defect or malfunction of the product. In some cases, it will even protect against inadequate information that is included in the warning that comes with the product. The three main types of claims that consumers can make of a product are as follows. Product flaw: the product, while in its making, ends up unsafe for the general public.

Design defect: Somebody claims that the actual idea and design is not safe enough to even be produced.

Defective warnings or instructions: this is when sufficient warnings of the product or instructions on how to use the product are not included. No matter what kind of claim that it is, such things can actually destroy a company. It really does not matter what kind of product the business is selling. Product liability insurance is a must at all times for all companies no matter what size they are.

The Advantages of Product Liability Coverage to Protect Your Product Business

The most important aspect of product liability insurance is the ‘product.’ This type of product insurance covers damage claims made by people who have suffered losses or have been harmed by the faults of a product. Thus, having a product defect problem could lead to litigation so it would be very important to have product umbrella liability insurance.

It is important not to confuse “faulty” and “flawed.” Indeed, a defective product is one that does not allow the use that could be expected of it (e.g. a TV that does not display an image).

This type of product is not covered by the Product Liability Act. Defective products are those which have a security breach (e.g. an imploding TV). The scope is big for people too. People affected by this Act are specifically designated.

The victims are protected under product liability coverage. If they claim for damages, the product liability insurance can protect you. The Civil Code expressly excludes all distinctions between contractors and third parties. The product manufacturer is necessarily a professional who has worked on the raw material, component, or part of the product. Only the latter is in principle, liable for damage caused by a defect in his product.

However, if it cannot be identified, then it can involve an equally responsible supplier or seller. The enlargement of the range of leaders is in the interest of the victims. It is not necessary to distinguish whether the head is linked to the victim on the basis of a contract. The product **manufacturing liability insurance policy** protects you against claims arising from accidents or injuries due to your factory or company claims and applies to both the contractual field and tort.

The scope of product liability coverage is important with respect to time. To fall within the scope of the law, the product must have been in circulation after 1998.

The circulation results in two characters:

  • The producer was taken off the product
  • The product is offered for sale or any other form of distribution

In 2006, the USA civil law gave a definition of commissioning of a product. This is the stage where “the product leaves the manufacturing process and enters the marketing process.” This definition is important for product liability insurance. The law provides two deadlines for action beyond which product liability can no longer act:

  • The limitation period: The law imposes a period of three years after the date on which the claimant knew or should have known about the damage, the defect and the identity of the producer. Beyond this period, the product liability insurance does not come into the picture.
  • The marketing-related period: the victim cannot act against the producer beyond 10 years after the release of the product. If the damage occurs within that 10 years, then the action against the victim is prescribed by three years from the day he became aware of the lack of security. According to the Civil Code based on consumer protection, the product is put into circulation when the producer is relinquished voluntarily. A product is the subject of a single release.

The law has some evidence requirements to identify the specific faults of the manufacturer. Therefore, the manager cannot avoid liability by showing that he has committed no fault. He can no longer avoid liability by showing that the product was produced within the rules of art, or in accordance with requirements. It is, therefore, not an accountability system based on fault. The manager can get product liability insurance too.

A Look at 3 Common Types of Business Liability Insurance Coverage

Most business owners are aware that they should research getting business liability insurance coverage, but only a small percentage realize that there are significant differences in the types of liability insurance policies. Professional indemnity insurance, product liability insurance, and general liability insurance are the three main types, and they differ significantly on the types of claims they protect a business against.

To begin, let’s cover product liability insurance – the first step is to understand liability when it comes to products. Product liability, or the legal responsibility of an entity regarding their product and its relation to a consumer, is something that any entity in the distribution cycle of a product can bear, including manufacturers, distributors, refurbishers, resellers, and retailers. Any claim brought up by a consumer that alleges injury, damage, or loss due to the use of a product can be placed against any entity in the entire creation & distribution cycle of a product.

When it comes to manufacturers, product liability lies in the quality of the product workmanship, quality of materials used, the functioning of each individual component in the product, the reliability of the design of the product, and the warning labels placed on the product or in the packaging. If any of these elements are missing or inferior, the chances of product liability claims can be much higher.

The other entities who handle the product in any way, including those between the manufacturer and the retailer, are also liable for product-related claims. In the United States, a consumer with a product claim has full rights to see the names of all businesses who had anything to do with a product and can bring a suit against any of them.

According to the insurance provider ( Products-Liability-Insurance.com ), when it comes to the person bringing a claim against a company concerning a product, they don’t even have to be the one who bought or used the product. A complete stranger can be walking past someone using a product, and if that product causes the stranger to suffering loss or damage or injury, they can bring a lawsuit against a company or companies they feel are responsible.

Professional indemnity insurance is better suited to a business who provides services, such as an accounting firm, a medical doctor, an architect, or a consultant. These providers are at risk of having a claim brought against them if the services they provide cause someone to suffer loss or damage. Many times, an omission is the number one cause for claims. Consider if an accountant omitted some crucial information from financial statements; this could be devastating for a business.

General liability, while it does contain some level of product liability, is better suited for businesses who don’t sell large quantities of products, but rather deal with non-risk associated businesses. This is a good starting place for any business, with the option to move towards product liability or professional indemnity if necessary.

Necessary Products Insurance to for Product Liability Lawsuit Protection

Nowadays, there are insurance policies to suit virtually every issue or scenario. In areas where they happen to be absent, customized policies can be formulated, and premium charges appropriately applied. For people whose businesses fall in the area of production, product liability insurance is very necessary.

A product generally refers to any physical item that is either sold or given away.

Sometimes, products can cause injuries, or damages to properties of customers, and thereby attract lawsuits that could put you out of business. In cases where you are found to be legally responsible for such injuries or damages, you can very well be ordered to pay compensations to affected parties, especially if such products sport your business brand, or you were in command of handling them in any way and cannot identify the manufacturer. It is important to note, however, that the laws guiding product liability vary from country to country.

It is quite possible for businesses occupying higher positions in the chain of production than you to end up bearing the full brunt of product liability in such circumstances. For that to happen however, you must be able to prove that the products involved were faulty before they even got to you.

You must also be able to prove that you have good quality control systems in place, and that terms for return of faulty goods were included in the manufacturer or processor’s contract that was given to the consumer in question. Adequate precautionary measures, such as quality staff training in the use of appropriate and quality systems, must be found to have already been in place.

Finally, it is important to read through the terms and conditions of your insurance coverage before signing the contract. This will help you to avoid careless oversights that could result in you not deriving the full benefits of product liability coverage.

Protect Your Business from Your Own Customers with Product Liability Insurance

Businesses that manufacture products, or otherwise distribute and sell products to the general public need to protect themselves against potential future lawsuits by their customers. Those businesses need to maintain product liability insurance policies.

Product claims against companies could range from death or bodily injury done to a consumer by the product, to claims for damages done to a consumer’s property.

A business that is in any way involved in the process of getting a product into the hands of a consumer, no matter how seemingly remote the connection, is liable to be named in a lawsuit. One hefty judgment by a court in favor of a plaintiff may be enough to put a company that has insufficient product liability coverage out of business.

Product liability insurance protects a business against actual product defects, inadequate labeling (including inadequate labeling on how not to use the product), design flaws, and the like. Be sure to obtain a product liability policy that covers all of your potential costs: economic, statutory, and punitive damages.