Product liability insurance is one of the few insurance policies that are considered to be most vital in the commercial sector. This insurance product was specifically designed to target manufacturers, distributors and all related traders of fast moving consumer goods. This insurance coverage is vital for the above stated business fraternity due to the fact that it is designed to protect them and their business. Product liability business coverage is designed to protect the manufacturer, distributor and all related traders from taking liability for damages caused by use of a dealership product. In the event that a manufacturer or distributor or any related trader of a product is sued by a consumer of in court and is forced to meet the liability to pay for the damages caused, the insurer covers the payment on behalf of the above stated client.
This coverage guarantees the commercial traders against incurring any financial handicap in the event that the above situation occurs. This kind of situation is likely to lead a commercial trader into turmoil, especially if the law suit demands that the consumer be paid a large sum of money. Such kind of a situation is likely to negatively affect the cash flow of the business and may lead to losses of financial crisis.
But if the commercial trader had taken up Product Liability Insurance coverage, there will be no need to worry. The commercial trader will just be on business as usual as the insurer settles the matter with the authorities and the suing consumer.