Indemnity from Product Liability Coverage Could Just save Your Business

Whether it’s a small business producing handmade children’s toys or an international manufacturing conglomerate, any business, regardless of size or product manufactured, is at serious risk if it does not have product liability insurance.

If your business is involved in any way in the process of manufacturing a product – whether you are a supplier, the actual manufacturer, or a retailer, it is important that you obtain this insurance.

You may say to yourself – I’m a responsible businessman, I produce a safe product,

why would I waste money on this type of insurance?

The answer is simple: while you may be responsible, your consumer may not.

There are several ways in which a business can be subject to legal action or civil suits with regards to its products.
  • The product may be defective and cause harm to the customer. Even if the business had no knowledge of the defect it may still be held responsible.
  • A consumer may use the product in a way other than it is intended. Even though the consumer used the product in a way other than what the business intended they can still be held responsible if they did not expressly advise the customer through a label or warning in the instruction manual that the product is not to be used in that manner.
  • Even if the consumer has no actual standing to make a claim against your business – frivolous lawsuits are filed, and even if the business is not ultimately held responsible the legal fees incurred during the process can be crippling.

Depending on the size of your business and the amount you sell each year’s premiums cost to obtain products insurance coverage for liability security may vary. But insurance of any kind is a tradeoff – you may pay a high premium, but you may be saving yourself much more money (and even your business) in the long run by obtaining product liability insurance.

While some people know that product liability is about a business being held liable for injuries or property damage arising from the use of a product that is defective or not clearly labeled, many do not realize that it is not simply about the person who purchased the product having the right to sue the companies involved in the distribution of the product.

For this reason, it’s imperative that a business gets a policy that protects them from products liability insurance. Actually, any person who is harmed (or who suffers property damage) due to a defect in a product can get full disclosure about the companies involved in the distribution of the product.

That means that even passers-by who are simply at the wrong place at the wrong time can get the information they need to sue every single business involved in the distribution process of a product that caused the injury or damage.

Do You Really Need Product Liability Insurance?

When it comes to the products of a company or manufacturer, no one likes to hear the word “liability” because of the implications that are associated with it.

But “liability” is one of the few terms that are most common in the business market.

Often, the business person has to bear charges due to the damage inflicted by their products and in the absence of any appropriate product liability insurance, the company may suffer a great loss.

Such, unwanted circumstances make it necessary for the companies to have appropriate product liability insurance in order to sustain any liability charge against them.

  • However, who should go for product liability insurance policies?
  • Should sellers be more concerned about liability charges?
  • Alternatively, should those who lease out the products, worry about the liability issues?
  • On the other hand, the manufacturer has the most threat from liability problems?

    Well, to be honest, all of them must take appropriate precautions in order to avoid any liability lawsuit against them! To sum this up, every distributor must have the protection of product liability insurance.

There are companies, which exercise ignorance and carelessness when it comes to tackling the liability issues and these companies usually, ignore the cautionary measures! Thereby, they run a high risk of suffering a great loss due to product liability lawsuits. So, if you are one of the distributors in the present-day market, then, you must take caution to avoid any damage through liability charges.

Do not take risks and act before the damage is done!

While being in business, there are all sorts of scenarios that could transpire making a small business very vulnerable to being involved in a lawsuit. Although almost never intentional, products can become defective during the manufacturing process, be overlooked, and find themselves in the hands of the end consumer. This, in turn, can potentially lead to the injury or harm to someone leaving the company responsible for the producing the product liable.

That is why it is so important for businesses to fully protect themselves with product liability insurance for small business.

Liabilities can range from causing personal injury and/or property damage due to the product being defective or flawed, to neglecting to give proper warnings on how to use the product correctly. Since there is so much exposure to being sued, it is extremely important that companies have product liability insurance to cover their bases should an incident happen.

This type of liability insurance coverage can help in protecting the business from being dragged into costly court cases, which can lead to monetary loss and destroy the reputation of the company. Although some general insurance plans may provide some coverage for these legal cases, they may not fully cover the business owner. Having specific insurance that completely protects the company is certainly a must.

A Look at Why a Product Insurance Policy Is Essential Coverage Today

In business, people have to face a lot of difficult situations and tackle them with utmost care. However, many business people are neglecting those situations as simple one and moves on with their proceedings.

This is not good as it could lead to some serious legal problems in the future.

Like this one thing which the business people not taking care properly is the lawsuit.

In every business they can face any kind of lawsuit for various reasons that include defects in product, injury because of using the product, false promotions, and even besmirch. To protect businesses, from this kind of lawsuits, it is necessary to apply for a product liability insurance quote for defective products which protects the business owners from any kind of lawsuits such as claims against injury, defective products and like this anything.

Some examples in which you could be sued if you don’t have this product liability insurance is, if anyone using your companies product and the product is defective which causes injury to the concerned person then he/she could sue you. In another case due to improper use of the product the person using the product may got injured for this also you could be sued.

All these lawsuits are possible to handle without any hassle if the business people have product liability insurance.

Hence it is advised to take product liability insurance for any kind of business without fail and it is considered to be one of the essential things.

This plan is appropriate for all industries where the need for paying damages on account of defective products may arise. There are some features of product liability insurance that cannot be overlooked, these are listed below:

  • The policy pays for costs that the insured is lawfully responsible to pay as a result of unintended death or injury, including damage to third party property due to any fault in the product manufactured.
  • Exports to other countries can be covered, and domestic sales are also of course covered.
  • Products manufactured by accredited manufacturers on their own trade name can also be covered under the same policy.

There are also some benefits involved, these include.

  1. Claims as a result of accidents during the policy period due to defects in the product can be covered by the insurer.
  2. It covers injury to third party and contamination liability on account of products covered.

The main reason behind this type of policy is simply to guard against liability. In case a product is sold, and it is found to be unsafe, the seller can avoid expensive consequences in case a customer is injured from it in some way.

It can also provide extra guarantees, in case someone finds the product defective, the company can avoid a potential lawsuit or charge of parody.

The company can help ensure that the product is safe and meets the consumers’ needs. If an occasion arises where the product doesn’t work, the seller will be able to cover the situation and make sure that it is repaired and works accurately.

Why You Can’t Afford Not to Have Liability Insurance for Products

Product Liability Insurance or product recall coverage is necessary for any product manufacturer, importer or product seller business that offers products to others. This is due to issues with product liability negligence, misrepresentation and even injuries or damages that are caused by the products sold and purchased.

No matter how confident you are in your products, you still have the need for liability insurance coverage to protect you from potential lawsuits.

The risk of a lawsuit is not always tied into how well the product is made. A consumer could simply misuse your product and harm themselves or their property, and legally sue your company.

Even if your product is not to blame you could lose everything you worked for if you are not protected by products liability coverage. As a small business owner, you can rest a little easier at night if you have insurance protection covering you.

The recent US recession might have tempted you to cut corners on side expenses, but coverage such as liability insurance on your products is one thing you can’t go without.

Here are some situations you could be sued into oblivion over if you’re not adequately insured: Forgetting to include a warning on a product or having inadequate warnings. And almost anything can be construed as ‘inadequate’ these days. It doesn’t have to be a product you made yourself, even – it can just be something you sold or distributed to sellers, or merely altered or improved for a fee.

Similarly, injury-causing products are a bane to any company. If it can possibly someone or something in any way, and that person is willing to sue you, you’ll have a tough time of it without insurance to pay them off. How many products do you know that is completely incapable of hurting anything or anyone? Don’t forget intangible ‘things’ like electronic information!

A company can also be held responsible for base design flaws in a product, and a design flaw can be a lot of different things. Since design inherently has to compromise the wants and needs of the user with the realities of physics and the finances available to manufacture it, it’s almost impossible for a design to be truly flawless.

So if your company has anything to do with any product… and it probably does… then

you’ll want product liability insurance to take care of all those nebulous hazardous situations that not only might but will probably arise.

It’s scarcely possible to function in today’s market without it, and you’ll be surprised at how quickly the benefits make up for the premium cost.

Why Product Liability Insurance Is So Important?

In an economy such as we have in front of us today, businesses have to be aware that any financial difficulty or unexpected expense could be their very downfall. There could never be a more appropriate time to consider business liability insurance and risks you might be facing.

Business liability can mean a lot of different things… and there are insurance products designed for a variety of different business liability risks. One such product is product liability insurance.

Any company who sells a product to the public must make sure that they are capable of meeting head-on any problems that might come from that.

Product liability insurance is intended to cover damages and legal expenses that arise from claims against you and your legal responsibility.

Even if you’re not a manufacturer… if you’re a supplier, for example, a purchaser, user, or even a bystander can sue you, the manufacturer and anyone else who they feel should have noticed a defect in the product. You would be responsible for any judgment against you, and most likely for legal claims also, and this is where product liability insurance comes in to cover those fees.

Business owners never want to see a lawsuit, and they certainly don’t intend to wind up paying a lot of money out in a product liability case. But not planning for the possibility can be the “end” for many businesses who sell products.

How to Cover Your Business Assets With Product Liability Insurance?

If you are involved in any way with the process of delivering a product to consumers, and you’re without product liability insurance coverage, you’re in a position about as risky as the parachutist who fails to ensure that he’s hooked up before jumping from a plane.

In most courts, anyone in the chain of delivery of a product, from manufacturer to retailer can potentially be held liable if a consumer is harmed by that product. Increasingly, the burden of proof in liability suits is on the plaintiff – and that, my friend, is you.

Payouts in liability cases include medical costs, court costs, and often, a hefty sum for emotional distress. While you’re adding the costs up, don’t forget what you have to pay your own lawyer.

If you’re a small business, losing one liability lawsuit can wipe you out.

Insurance premiums aren’t cheap, and you might question why you need to pay them. Think of this way – let’s say you look out this morning and it’s cloudy. It might rain, and you have to decide whether or not to carry an umbrella. If it doesn’t rain, you’re stuck with lugging an umbrella around all day. But, that’s a minor inconvenience compared to what happens if you’re caught in the rain with one.

Consider product liability insurance policies to cover your assets and to guard against the rain of a liability suit which could really soak you.

How to save Money on Liability Insurance for Your Business

Running a business can be one of the most rewarding things, but it can also be a very risky venture. By being a business owner, you open yourself up to a greater risk of claims against you for fault, even if you take extreme care to make sure you provide quality service and products.

Liability insurance for businesses is one way to protect your business from the expenses associated with lawsuits… but the price tag on policies can be high.

First, it’s important to determine the type of policy you need. There are general liability policies, which protect a wide variety of claims. There are professional liability policies, which protect a service-based business against claims of error, omission, or malpractice. And there are product liability insurance policies, which protect businesses against claims of injury or damage from a defect in a product you manufacture or sell.

Once you determine which type of policy suits your business most closely, it’s time to work on getting the best rates possible.

First, shop many different places. Try looking for online business liability insurance… many times, you can get a better price online than you can from a local insurance agency. Internet sites frequently can get quotes from many different carriers and give you free quotes. You never want to just get a single quote… make sure you get more than one before you make your decision.

Then, see if there is a local group you can join that would offer discounted insurance rates for members. An example might be the Chamber of Commerce in your city.

You can also see if you can bundle policies together that you need from a single company – sometimes you get a discount by purchasing more than one policy.

The last suggestion is to find a niche policy broker. Rather than looking for someone who sells liability insurance to all businesses, see if there is a provider catering specifically to your industry. They might know the intricacies of your business and find ways to save you money.

Who Needs a Defective Product Liability Insurance Policy?

Product liability insurance covers losses related to a product or injuries incurred by someone as the result of a defect or malfunction with the product.

The 3 main types of product liability insurance claims are for

flaws stemming from the manufacture of the product, design defects, or incomplete or incorrect instructions or warnings.

Contrary to what many people believe, it is not just the manufacturer of a product who can be liable for product safety claims related to that product.

Claims can also come because of problems with the product’s storage, transportation, or handling after it has left the manufacturing facility.

Whether you are a manufacturer, distributor, installer, or importer churning out thousands of products items routinely; the need for product liability insurance is a definitive aspect of doing business.

Product liability insurance is the blanket policy that protects your company against claims made against your firm for the products you make.

This can be a business-saving solution when a consumer has levied a claim against you for a defective or faulty product and you are potentially facing hefty lawsuit fees and settlements.

Product liability insurance is a required part of a business, no matter how large or how small your operations are.

Far too many companies who resell products, whether it be wholesale or retail, forget or don’t know that they should also have product liability insurance.  Don’t wait, get coverage today so you can know that your business is protected.

Why Product Liability Insurance Is Needed for Product Claim Defense

Product liability insurance is not mandatory but certainly beneficial if you are involved in any type of retail business that sells, supplies and delivers products to clients.

You and your business can be liable for a liability case that is just a claim even if the product you sell was manufactured by a third party.

Someone running a business should not be under the impression that because the business is only involved in distributing, product liability coverage is unnecessary. Even if your company’s name is not on the product you can end up in court.

Without a commercial product indemnity insurance policy, your business and possibly your home could be in jeopardy.

All product manufacturers, product distributors as well as suppliers and retailers of goods should get a product liability business insurance policy.

Does your business current sell products to the general public? If so there could be a design defect in your product that could cause you to have a liability that you don’t even know about yet.

This would mean that your company could have participated in placing the product into the public where others can purchase it and can be held liable for damages to the end user if something happened to someone due to design defects, manufacturing defects, and even defects in marketing.

If your company provides any products to the consuming public, then your company needs product liability insurance or completed-operations coverage.

A Look at the History of Product Liability Insurance in America

Prior to the year 1900, American businesses did not need to worry about having product liability insurance in place in case a consumer sued over a faulty or unsafe product. The theory of product liability and the need to have a business covered by an insurance plan that catered to product liability insurance comes from the industrial revolution.

Before machinery started producing quantities of consumer goods for sale, starting in the early 1900’s, consumers were expected to use their own judgment on if a product was well made or not. Quality craftsmen existed during this period of time, and they took pride in making individual products for sale.

As automobiles became popular after World War One, and factory production started including a labor force interested in running machines, the notion of product liability insurance started to become a thought that would still take years to develop. During the 1920’s and 1930’s early factory machinery did produce flawed items now and then.

Between the early 1900’s and the beginning of the 1940’s, consumers were buying products based upon a long-time theory of intelligence. It was assumed that consumers could tell when a product might be hazardous to buy, own, or operate and that it was up to each individual consumer to use common sense while shopping.

World War Two changed how factory productions worked and added the female population into the workforce. Factory machinery was streamlined, and more consumer goods entered into the marketplace. With the widespread use of electricity in new items becoming the norm – there were lots of product liability insurance types of claims entering into the court systems as consumers came in contact with faulty electrical products.

By the 1960’s our current expanded situation in product liability insurance issues was set in stone due to negligence, breach of warranty and strict liability. Court laws had changed to allow consumer’s access to the manufacturers and distributors of items being sold that were unsafe. While consumers still shopped with the attitude that it was up to them to judge a product’s safety, the laws were letting some product liability lawsuit plaintiffs receive large amounts of money for claims.

Today, product liability insurance is needed by all businesses that make or offer products to consumers. The consumer is no longer required to use any judgment at all while using a product for the purpose that it was intended for. If the product’s instructions do not make it clear that an electrical appliance should not be used in a bathtub this is a potential product liability insurance claim problem.

Product liability insurance covers manufacturers, retail suppliers, and store owners if a product somehow fails to meet the public’s standards. Each product sold, including those from an antique store, must have all hazards announced to the consumer or there is a possibility that your store will be making a product liability insurance claim.

It is very advisable today, with the product liability situation the way that it is, that all stores, retail supply sources, and manufacturers have some product liability insurance on hand and available in case a problem comes up. The courts are known to give consumers suffering damages very large settlements at times.

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.