Protect yourself from the legal liabilities of third party damage from product sale
What is Product Liability Insurance
Product liability insurance offers protection to distributors, manufacturers, retailers and wholesalers, against any legal liability arising out third party injury or damage to property which is caused by the consumption or use of the product sold or supplied. This insurance policy helps to protect a business against a legal issue and covers the expenses involved in the same. The product liability insurance covers any legal liabilities to third party arising out of injury or harm due to a product sold by a business.
Scope of coverage
The insurance covers any legal liabilities to third party arising out of injury or harm due to a product sold by a business.
- Bodily injury, illness or accidental death to a third party
- Accidental damage to third party property.
What is covered?
Any product can be insured under product liability insurance. The liability may arise out of factors such as
- Product defect which causes injury, loss, harm or damage to a third party or his/her property
- Packaging defect which compromises the safety of the product and causes harm to the third party.
- Improper use of the product, absence of warning labels/ precautions, etc. which affects the performance or quality of the product
This policy can also be extended to cover vendors. The add-on cover is called Limited Vendor’s Liability. You can get cover for liability arising out of sales and distribution of the insured product by named or unnamed vendors.
This policy can be availed by product manufacturers, distributors, retailers and wholesalers. This is regardless of the fact whether the product that is insured is the final product or just a part of the final product. Some insurers also extend this policy to the Export Community, which is legally bound to take Product Liability Insurance.