What is it?
Who needs it?
Distributors and wholesalers
Brick-and-mortar and online retailers
What is product liability insurance?
California businesses that make and/or sell products are exposed to potential risk long after they sell something. Should a product ever cause injury, illness or property damage, the manufacturer or retailer might be held financially liable. Product liability insurance may help businesses that make and sell products protect themselves against this risk.
Product liability insurance is specialized commercial liability coverage for product-related risks. Policies typically help pay court fees, attorney fees and settlements for covered claims.
What California businesses should carry product liability coverage?
Most California businesses that make, sell or transport products should consider product liability coverage. If there’s a claim, almost any business that handled the faulty product might be sued.
Because almost any business that handles products may need coverage, there are many different types of businesses that purchase product liability policies. For example, any of the following businesses likely ought to consider a policy:
- Manufacturers and installers
- Distributors and wholesalers
- Brick-and-mortar and online retailers
- Freight companies and delivery businesses
- Storage facilities and warehouses
What types of products can be insured with product liability coverage?
Product liability coverage is readily available for most products. Policies can cover everything from dollar-store souvenirs and socks, to consumer electronics and furniture.
While certain risky products can be more difficult to insure, policies are usually available for these too. An insurance agent who specializes in product liability coverage can help businesses that have more risky products.
Should restaurants and bars carry product liability coverage?
The foods and beverages that restaurants serve are usually considered products, and so are any sauces, rubs or other cooking ingredients that they sell. Should any of these cause food poisoning or choking, a restaurant could be held liable.
For this reason, most restaurants should consider purchasing product liability coverage. So too should bars, cafes, coffee shops, bakeries, and other businesses that offer food or drink.
An insurance agent who knows product liability policies well can help these businesses find a policy that’s well-suited for insuring food and beverage products.
Does general liability insurance extend coverage to product-related claims?
General liability insurance policies primarily protect against common accidents that could happen to almost any business. For example, general liability often includes protection against “slip and fall” injuries.
Product-related injuries, illness and property damage don’t automatically fall within the definition of common accident. General liability policies, thus, often exclude product related-claims. A few policies do include minimal coverage for product claims, but the coverage is so limited that any business selling products probably still should have a separate product liability policy.
How much does insuring against product-related risks cost?
The premiums charged for product liability policies vary, as insurance companies base them on multiple factors. The number of products, classification of products, and any previous product-related claims can all influence premiums. So too can a business’ sales, mode of selling, chosen limits, and numerous other details.
The easiest way to find out how much product liability will cost in a given situation is to compare policies with an independent insurance agent. Independent agents aren’t obligated to promote any one insurance company, and can instead recommend the best policies available in California regardless of what insurer offers them.
How can businesses get product liability insurance?
If you need help insuring against product-related risks, contact the independent insurance agents of Heffernan Walton Insurance. Our agents have helped many manufacturers, distributors, freight companies and retailers in California. We have the expertise necessary to help you choose a product liability insurance policy that’ll protect your business well.