Product Liability Cover

About product liability insurance

• What is product liability insurance?

  If a consumer becomes ill or injured because of a faulty product you’ve made or sold, they may be able to claim compensation. The same even applies in cases where defective products may result in damage to someone’s personal belongings or property.

  Product liability insurance offers manufacturers and distributors the financial protection to cover the costs of compensation claims made against the business. In many cases, this type of cover may also help you with the relevant legal expenses if an injured customer wishes to sue.

  Even though many items are designed and manufactured to be safe and fit for public use, a fault on the production line could mean a certain batch of products ends up malfunctioning or causing injury. For example, a talking teddy bear toy could be potentially dangerous if the battery pack or internal wires aren’t connected up properly.

  In many cases, manufacturers will issue product recall notices if a bad batch is discovered. While this may limit any damage experienced by consumers, it’s vital to have product liability cover in place anyway for any cases where somebody could be in danger.

• Do I have to get product liability cover?

  There’s no mandatory legal requirement to have product liability insurance, but other businesses you work with – such as retailers, distributors or suppliers – may request that you have suitable protection in place before any goods are traded.

  By law, if you make or sell products, they must be safe for members of the general public to use. Even though you may take every precaution and rigorously test the safety of your products, however, there could be times when something goes wrong.

  In case the worst should happen, you or your business may be held liable for the damage caused. As a result, you may be expected to take part in legal proceedings and pay out for compensation claims. Both of these can be quite expensive things to deal with, especially if you don’t have any financial protection behind you.

  Because you can never be 100% sure that all products you’ve manufactured or sold will be totally safe, having product liability cover in place is strongly advised. After all, it’s much better to have it and not need than to not have it and face a mountain of costs that come out of the blue.

• How much insurance do I need?

  If anyone should become injured from a faulty product or ill from badly prepared or tainted food, you could potentially face legal action for compensation. There’s no limit to the amount you may need to pay out as this will depend on the severity of the issue, whether it’s a short-term illness, permanent injury or even death.

  Most insurance providers will offer product liability protection of up to £10 million and may also tie in with public liability insurance. When thinking of whether you need cover of £1 million, £5 million or even £10 million, the type of products you make and the potential risk to others should help you to make an informed decision.

  Compensation claims can be extremely high as they may take numerous factors into account. From repair and replacements costs of damaged property, to medical costs and loss of income for anyone suffering with a serious injury, individual claims will vary in size. Because of this, you’ll need to use your best judgement to choose a level of cover that suits you and your business.

• Choose Arkwright for your specialist insurance

  To help point you in the right direction for the level of product liability insurance you need, the team at Arkwright is made up of specialist insurance experts. We’re determined to make it easy for you to get a tailored policy at the lowest price to suit your business.

  Give us a ring on 01204 392 525 to get started with one of our experts, who will be able to discuss your product liability needs and consult with our panel of insurers to find you the best policy. Alternatively, you can click on the “Get a quote” button and send us the relevant details so we can get back to you shortly.