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What is Product Liability Insurance?

As the owner of a business, you are liable for any products you manufacture or sell—and if somebody is hurt as a result of using the product, you may be at fault for the incident.

When you ask for coverage from our agency, we will determine the likelihood of a lawsuit being brought against you as a result of one of your products being used. Our experts can identify the risks associated with your products or services and appropriately scale a policy to cover those risks. We can also offer advice on how to make your products less prone to risk. This may involve modifying your product, packaging it differently, or changing any instructions and warnings included with the product. When done well, these precautions can help reduce the company's liability and stop customers from using the product in an unsafe way.

Do I need Product Liability Insurance?

If your company manufactures or sells any kind of product, it is strongly recommended that you have some form of liability coverage. Even products that are widely regarded as 'safe' can malfunction in a way that causes harm to the user, and defending against a lawsuit is usually expensive enough that many companies (and claimants) prefer to simply settle out of court. Product liability insurance can reimburse you for expenses (including defense costs and settlements) that occurred during this process.

Product liability cases that go to court are among the most expensive forms of personal injury cases, and as of 2013 these cases had an average payout of more than $6 million. All companies that obtain this type of coverage are encouraged to have a policy limit higher than the median payout—anything less makes it likely that your company will suffer significant losses if a jury decides against you.

Don't forget to talk to your agent on a regular basis as your business continues to grow. Larger businesses often face larger risks than smaller ones (including, among other things, increased exposure as a result of having more customers who could potentially file a lawsuit). A plan that suffices for a small company may not be enough to protect a large one.

What does Product Liability Insurance Cover?

Product liability insurance mainly covers the legal obligations of a company. This may include payments like:

  • Court fees
  • Legal defense costs
  • Personal injury awards
  • Out-of-court settlements
  • Miscellaneous fees that may occur during any of the above

If you feel any of these forms of coverage are missing from your policy, or if you are starting a business and need product liability coverage, speak to a JBN United Insurance Services agent or request a quote today.

 

1. Ross, Kenneth. "The Role of Product Instructions in Product Liability Prevention." In Compliance. April 30, 2015. Accessed April 18, 2016. http://incompliancemag.com/article/the-role-of-product-instructions-in-product-liability-prevention/.

2. "Settle Your Personal Injury Claim." AllLaw.com. Accessed April 18, 2016. http://www.alllaw.com/resources/personal-injury/settle-your-personal-injury-claim.

3. "Product Liability." III. Accessed April 18, 2016. http://www.iii.org/fact-statistic/product-liability.

Our Location

JBN United Insurance Services

270 Conejo Ridge Ave., Suite 205
Thousand Oaks, CA 91361
Main office: 805-296-7877

Our Providers

At JBN they know that Certificates of Insurance are critical for Contractors. JBN gets them to me quickly and accurately. The staff is very knowledgeable and responsive.
We have partnered with JBN to handle our commercial insurance and risk management needs for over 15 years. We never hesitate to recommend them to other business owners.
Our firm has greatly benefited from the consultative and strategic approach the JBN team brings to risk management and commercial insurance.
The JBN Team is remarkably responsive to our firm’s needs. Creative, accurate and knowledgeable.
The Team at JBN helped us to understand the various coverage options available and guided us through making the right decision for our company.