Product Liability Insurance
What Is Product Liability Insurance?
Product liability insurance is business insurance that protects companies from financial losses if a product they manufacture, sell, distribute, or import causes bodily injury or property damage to a third party.
It covers legal defense costs, settlements, and court judgments, even when the business is not found at fault.
What Is Product Liability Insurance For?
This type of coverage is for protecting businesses from lawsuits and claims caused by defective, unsafe, or improperly labeled products1.
It helps cover:
•Injuries or illnesses caused by a product
•Damage to third-party property
•Lawsuits alleging a product was dangerous or defective
•Legal defense costs
What Does It Cover?
Product liability insurance helps cover the legal, medical, and settlement costs when a product you manufacture, distribute, or sell is alleged to have caused injury, damage, or death.
Product liability insurance protects your business from serious legal and financial risks tied to how you design, manufacture, or sell a product.
- Property damage
- Wrongful death
- Products manufactured, distributed, or sold by the business
- Design flaws
- Manufacturing defects
- Improper or missing warnings
Types of Product Liability Claims
In 2024 alone, product liability cases accounted for an astonishing $13.7 billion in verdicts2. Types of these claims include:
•Design defects
•Manufacturing defects
•Failure to warn (marketing defects)
What Is Not Covered
•Product recall costs
•Employee injuries
•Damage to your own products or property
•False advertising claims
•Intentional misconduct
Who Needs Product Liability Insurance?
•Manufacturers and producers
•Wholesalers and distributors
•Retailers and online sellers
•Importers
•Businesses that repair or rebrand products
Is It Required?
Product liability insurance is not legally required in all states, but it is often required by retailers, online marketplaces, and business partners.
Product Liability Insurance Cost
The cost depends on product type, revenue, claims history, distribution channels, and risk level. It is often included in a commercial general liability policy.
Get Product Liability Insurance
Your Gild Insurance Agent is here to understand your business and find the right coverage tailored to your needs.
For a free, online quote in minutes, try out Gildber! The fast, hassle-free option for a business insurance.
Frequently Asked Questions
What is product liability insurance for?
This type of coverage protects businesses from financial losses when a product causes injury or property damage.
What is an example of product liability?
Examples include contaminated food causing illness or a defective product causing property damage.
What’s the difference between general liability and product liability?
General liability covers operational accidents, while product liability covers injuries or damage caused by products.
