Product Liability Insurance: A brief overview for Insurance Agents
Product liability insurance is a type of coverage for businesses that manufacture, distribute, or sell products. This type of insurance provides protection against lawsuits and financial losses that may arise due to injury or damage caused by a product. In this article, we'll provide a complete overview of product liability insurance, including what it is, who needs it, and how it works.
What is Product Liability Insurance?
Product liability insurance is a type of coverage that protects businesses from liability claims related to their products. This type of insurance covers a variety of scenarios, including manufacturing defects, design defects, and failure to warn of potential hazards. If a product causes harm to a person or damages their property, the business may be held liable for the damages, and product liability insurance can help cover the costs associated with such claims.
Who Needs Product Liability Insurance?
Any business that manufactures, distributes, or sells products should consider getting product liability insurance. This includes businesses in various industries, such as food and beverage, pharmaceuticals, electronics, and toys. Even businesses that only sell products that they did not manufacture may still be held liable for damages caused by those products.
How Does Product Liability Insurance Work?
Product liability insurance works by providing coverage for legal defense costs, settlements or judgments, and other related expenses. The coverage amount and limits of the insurance policy depend on the specific needs of the business. The insurance company will investigate any claims made against the business and determine if the claim is covered under the policy. If the claim is covered, the insurance company will pay for the costs associated with the claim, up to the coverage limits.
Conclusion
Product liability insurance is an essential type of coverage for businesses that manufacture, distribute, or sell products. This type of insurance can provide protection against lawsuits and financial losses that may arise due to injury or damage caused by a product. As an insurance agent, it's important to educate your clients on the benefits of product liability insurance and help them find the coverage that best suits their needs.