Even when a product has been designed and manufactured to the high standard and produced from quality materials, things can still go wrong.
Product liability insurance is designed to cover the cost of compensating someone who claims to have been injured by a product that your business designed, manufactured or sold. It can also protect you from the legal fees associated with your defence of a claim. If you make or supply products to the general public it’s your responsibility to make sure they’re safe. You also must comply with health and safety and product safety laws – otherwise you may face legal action.
A product liability claim could deemed to have:
- Designed or manufactured the product
- Designed or manufactured a component part of the final product which was then found to be faulty
- Trade marked a product or put your business’s name to it
- Changed, updated or repaired a product
- Supplied the product but can’t identify the manufacturer or the manufacturer is no longer in business
- Are responsible for a production process which directly provides a particular characteristic of the product
Your business can still be held liable for faulty products even if you only designed them but did not manufacture them or if you gave them away for free.