Product liability refers to situations where a customer purchases a product, and an issue with the product causes a bodily injury or property damage. Business owners can be found responsible for the damages if the source of the issue can be traced back to the small business. Some of the common issues customers encounter that result in product liability claims include:
- Products that cause bodily injury to the customer
- Products that cause property damage
- Sickness caused by food or beverages
There are many different things that can cause a product issue, but 3 of the common reasons are:
- Design defect:This issue will be present in a product before it’s even made. It suggests that the design of the product is unsafe or faulty.
- Manufacturing defect: something went wrong while the product was being made; Improper assembly, or missing an important piece.
- Marketing defect:This type of issue has nothing to do with the product itself, but rather how it was marketed to the customer. Incorrect labeling, incorrect safety warnings (or lack thereof) or insufficient instructions are common marketing defects.
Product liability insurance will protect you against a lawsuit
Mistakes happen. You, your employees, your equipment or your suppliers could be the cause of mistakes that ultimately end up hurting your customers, your employees or other people who are involved with your business. Protect your business from being sued, and limit your liability. The right product liability policy will help protect your business from legal costs if you’re found responsible for a product causing bodily injury or property damage to a 3rd party.
Do you need product liability insurance?
First of all, there’s a common misconception among some small business owners that they don’t need insurance, or that it’s too expensive. The truth is, whether you’re a baker selling delicious cupcakes, or a boutique selling the trendiest clothes—you should always protect yourself from the risk of product liability claims. Consequently, the minute you start selling your product you’re at risk for product liability lawsuits, which can be very expensive and time consuming.
Any small business that produces and sells a product should have this type of coverage, including:
- Clothing stores
- Gift shops
- Specialty food stores
- Coffee shops
- Pet stores
- Print and copy shops
Finally, keep in mind that product liability claims are not only a risk for business-to-consumer operations, but also business-to-business operations. If you produce a product that you sell to other business owners, you still need product liability insurance. Some of these businesses would include:
- Software developers
- Website creators/designers
- Raw material suppliers
- Equipment suppliers
Use Our Resources to Get a Custom Insurance Package
As Business insurance brokers in Hamilton , we have access to a variety of different insurance plans. To learn more about affordable customized protection for your business call today!