Product Liability Insurance

What Is Product Liability Insurance?

Product liability insurance protects inventors, manufactures and sellers from flaws and defects in any publicly available product. Unprotected, your business can be responsible for:

Medical Costs

Compensation for Damages

Economic Damange Punitive Damages Attorneys’ Fees

These damages and fees, depending on the number of people affected, can put a business into bankruptcy. With a simple product liability insurance policy, a business can protect itself from most or all of these costs. A product liability policy covers:

Production Flaws

Insufficient Warnings Design Defects

Recently, some Chinese manufactures produced plastic children’s toys in the presence of lead. Multiple parties would be responsible for the production flaw in this product. The manufactures could be sued for producing the product in the presence of dangerous chemicals. The retail outlet or seller can be held responsible for selling a product that is not safe for the end user.

Insufficient warnings include an undesired side-effect of a product that was not properly label/explained. An example of this could include cereals produced in a plant that also processes peanuts. The cereal could physically harm individuals allergic to peanuts. The cereal may be produced from a source that does not contain any trace of peanuts, but production can add peanut residue to the cereal. Without a sufficient warning, a hyper allergenic consumer is vulnerable to the cereal and the company is responsible.

A design defect can be something as simple as a handle breaking off a hot coffee mug to an airbag failing to deploy in an accident. In both situations, the company is responsible for their product failing to perform as advertised.

Basically, if your company is involved in the production or sales for a product, then your company needs protection through liability insurance. It’s not worth the risk, one liability case can destroy a company.

Pricing for liability insurance is based on the type of product, the number of sales, the company’s role in the supply chain and the intended market for the product. Many businesses will lie about the volume of sales or where a product is produced to receive a lower premium. Remember, if an insurance company finds that you lied about a critical piece for determining a premium, they can (and probably will) charge substantial under insurance penalties.

When making decisions about product liability insurance, your best bet is to work with a product liability insurance broker. This individual knows the questions to ask to get you a policy that protects your business but does not provide more coverage that you require.

 

Products Liability

Products Liability

Products Liability is a law where the manufacturers will be held responsible for the injuries caused by their manufactured products. These laws differ from one state to another particularly in a country like the United States. So, the products liability comes to picture when there is a damage or inconvenience caused by the products manufactured by the respective manufacturers. The defects caused because of bad manufacture, design failure, product not functioning and fail often etc. Manufacturing defects mainly involve usage of bad and poor quality of raw material, lethargic workmanship. Releasing products without testing them and resulting in non-functioning will also be considered and is liable. Many of the Product liability cases are very difficult to prove as most of the companies do spend years of testing before they release a product to the market.

Non education of statutory warnings will also result in involving products liability as it becomes the responsibility of the corresponding company to warn the public regarding the outcomes of their product according to their normal and abnormal usages. The other situation that can result in products liability is breach of warranty. This refers to a company which fails to provide support as promised within the stipulated warranty period. The law states that, if a company is manufacturing and releasing a product to the public with a corresponding period of warranty, then the company has to abide by their warranty rules and has no rights to breach the same. Strict liability is another part of products liability and this comes when the user or the customer faces injury because of the product. The end users have the right to sue the respective organization for their damages and medication for which the injured party has to prove that the used product is defective and was the reason behind injury.

The lawyers and the laws are strict against products liability cases and the lawyers in this field are specialized and skilled. It is advisable to consult a skilled lawyer in order to claim the corresponding damage and it is also important to note that these cases are often complex and expensive as well. Many of the lawyers handle these cases based on the corresponding contingency fee, which means they don’t get any legal fees until the case is completely settled and the judgment is announced for the same. So, once you have a strong proof it is then advisable to approach a skilled lawyer who has good knowledge and great skill in handling such cases.