A Quick Look at Why Small Businesses Need Product Liability Insurance Protection

All businesses that deal with any type of product that is going to a consumer need to be covered by product liability insurance today.
Product liability insurance protects the business from the chance of a lawsuit if a product causes damages or injuries after it is purchased.
Many people are running on misconceptions about their need to protect themselves from the products that their businesses are dealing with. Sadly, all links in a products lifespan chain between manufacturing and consumer possession can be sued if a product does not perform in a safe and healthy manner.
Small businesses are often shocked when a product liability lawsuit results in their own going-out-of-business sales.
Some businesses tend to believe that they are too small to need product liability insurance or that if they did not personally make the faulty product that their business activity of endorsing the product for sale somehow does not count.
The manufacturing process, the retail supply sources, and the retailers can all become victims of a product liability lawsuit that requires product liability insurance to cover.
As an example of potential problems, stores selling an open box that is missing a written product warning, or antique stores selling unsafe older items are both in the line-of-fire.
Many people agree that our society has gone too far on what we allow as lawsuits associated with faulty products on the market, but this does not negate the fact that businesses need some form of product liability insurance today because the laws do allow lawsuits to be filed over labeling or products that appear to be fine to almost all people.
America is known as the birthplace of product liability because this is the country that has the most problems with faulty products hitting our court system, but it is not just America that has problems that require businesses to carry some form of product liability insurance. In America, our problems are just magnified by our fascination with product recalls in the news.
For each product recall that is announced, there are manufacturers, retail suppliers, and retail sales businesses being advised to make a public announcement in order to stave off a product liability insurance claim.
For those who do not hear about the recall, there is a higher need to have insurance in place because some consumers go looking for a reason to file a copycat lawsuit in order to profit from that businesses product liability insurance financially.

The Need for Product Liability Insurance Coverage to Manufacturers

When you are an exclusive owner of an organization, there are a few advantages as well as a few disadvantages. An advantage is that you can manufacture the commodity of your choice while one major disadvantage is that if your product has caused any harm to the buyer, it can proceed as a legal case.

Whether the fault lies at your end or the client did not use the product appropriately, it will be you who will be accused.

With this in mind, you should always jump towards having your products insured in order that you do not face any material loss. The issue of having an appropriate product liability insurance policy should not be overlooked as it can at times save you and your business from a big loss.
Product liability insurance coverage helps to protect businesses from product’s claims relating to the goods; they make or sell.

Types of Claims

Now, these claims can be based on

  1. Design defects (where the issue of concern is that the design of the product in question is inherently safe)
  2. Defective instructions/warnings (where it is believed that the product was insufficiently labeled)
  3. Manufacturing flaws (in which case the plaintiff seeks to prove that some part of the production process created an unsafe defect in the final product).

The damages that are traditionally awarded in successful lawsuits include

  • medical costs,
  • economic damages,
  • and compensatory damages.
  • Some judges can even go further and demand that the defendant (the business) cover the attorneys’ costs and fees of the plaintiff and cough up punitive damages as well.So you see, product’s claims can indeed be very costly.

Retailers and other resellers are sometimes under the erroneous impression that they do not need product liability insurance coverage.
Many times a general liability insurance policy is not enough. Some people in the industry feel that they cannot be held liable simply because they are not manufacturers.
This is usually a costly mistake on their part because, in most places and circumstances, a company can be held liable for damages to a product’s end user if it participated in placing that product on the train of the commodities exchange. This makes distributors and retailers just as liable as manufacturers.
So, anyone who is in the business of manufacturing, distributing, or selling goods or products needs to have product liability insurance coverage to secure them or their organization.

Here Are Some Great Tips When Shopping for Product Liability Insurance

Product liability insurance belongs to a type of insurance, which does not contain a general structured plan. It is dependent upon the type of business, like some may want to purchase the policy for sports goods or any other popular sort of business, and some may want it for an industrial or a less publicized business.
The companies involved in making goods are in a huge need of insurance as there is a usual practice to sue the firm for manufacturing defects, product imperfection, damages, etc.

There are a lot of points that you need to keep in mind while planning to purchase a product liability insurance policy.

Furthermore, you should be very careful while selecting your insurance firm. Here are some tips that prove to be very helpful in the process of selection of an insurance firm: Have a thorough look at the areas covered by the insurance policy.
Many of the business professionals are not clear about their insurance coverage; it could be a result of an intentional or may be the unintentional lack of explanation by the insurance expert in the haste of selling the policy.

In fact, many of the people confuse the term product liability with general public liability insurance.

It is worthy to note that both the policies are quite different from each other.
Product liability insurance is meant to shield the business owner from any lawsuits resulting from a bad yield; whereas the policy that deals with all kinds of community dealings involved in a business is what we call a public liability insurance policy.
As a matter of fact, both insurance plans are equally important for running a safe business, but most of the time people think that the policies as an alternative to each other. The wiser decision is to choose a product insurance plan that has qualities of both the policies and provides wider coverage.

What Product Liability Insurance Does to Legally Protect Your Business

Most business owners have probably never heard about the need for Product Liability Insurance Coverage. The real critical question is…

What is Product Liability Insurance and Who Needs It?

Product liability policies protect businesses against legal claims from persons who allege that they have suffered sickness, injuries, or loss because of the product that the business supplies.
In a product liability insurance policy, a “product” means any tangible item that is sold or given away. According to the Consumer Protection Act of 1987, the business that supplies or manufactures the products is liable for the damages that the product may inflict on the customer.
If a product causes damage, the supplier, not just the manufacturer, can be met with a claim. An example might be… if you are the owner of a café, and the food you order from a vendor and serve makes someone sick, you can be sued as well as the manufacturer of the food.
The cost of a policy is determined by risk and the amount of coverage. The possibility of risk is determined by the product you manufacture or sell, how people you use it, and the types of warning labels or disclaimers on the product itself.

Who can be held liable in a product liability case?

When a consumer is injured by a defective product, they may be able to file a product liability lawsuit. But who can be held liable in these cases?

The answer depends on the facts of the case, but there are three main types of defendants: manufacturers, distributors, and retailers.

Manufacturers can be held liable if their products are defective due to a design flaw, manufacturing error, or failure to warn consumers about potential dangers.

Distributors can be held liable if they sell products that they know or should know are defective. And retailers can be held liable if they sell products that are defective or fail to warn consumers about potential dangers. In any product liability case, it is important to consult with an experienced attorney to determine who may be held liable.

The important thing to remember is that product liability insurance does not give you a license to create inferior, low-quality products. As a supplier, look for a policy that protects you against low-quality manufactured products, indemnity costs, safety claims, and more.
By and large, it is customary for business owners to choose general liability insurance as it is the most widespread form of business insurance. Furthermore, most believe that general liability insurance will adequately protect their establishment against legal ramifications.

Although this belief has substance, it would behoove business owners to examine and compare variations of coverage provided by both general liability insurance and product malfunction liability insurance.

As a rule, general liability insurance encompasses extensive topics involving legal responsibility as well as some degree of product liability. However, it fails to include any type of professional indemnity coverage; that is lawsuits. In the same way, product liability insurance weighs in the probabilities and risks that will have an adverse effect on their business.
Thus, product liability insurance is fashioned to save the product-based businesses against legal proceedings and claims of injury or damage to property evolving from the use of alleged defective products.
Consequently, business owners should incorporate product liability insurance into their insurance portfolio. Most importantly, product liability insurance acts as a shield or proper dressing of protection for business owners who markets, delivers, or engages in the transaction sequence of merchandise.
In view of that, small business owners should reflect on potential financial drawbacks and harm to their establishments if they fail to secure product liability insurance coverage.
Getting coverage is easy – just contact SADLER for a quick online quote. The benefits of coverage surely outweigh the consequences. The risks are insurmountable but not without a viable resolution.

Claim Protection from Possible Business Product Liability Claims

Product liability insurance is a classic way for a business to protect their future compared to other insurances that are currently available on the market. This type of insurance looks at the drastic side of situations when businesses are confronted with lawsuits from an injury or defective product.
Strict liability insurance for products is best for a business that exports products since at any given time a product could malfunction or be defective. These simple problems can escalate if the buyer is injured, especially since buyers do not always read directions and instructions.
Product businesses and product manufacturers do not always take into account the knowledge of a buyer and the intuition they may have. With these warnings, just because a buyer does not read them, the business will not be at fault.

The best way to prevent any accident is to include any warnings and cautions about the product, which can ultimately prevent any lawsuit.

Without this type of product liability risk insurance, businesses can get in a lot of trouble when buyers sue the business, many can even suffer an unexpected debt and eventually lose their business. Product liability insurance provides complete coverage to the business, which compared to many other insurances, cover far more possibilities.

A Look at the Risks of Neglecting Product Liability Coverage

So, if you are a manufacturer, distributor, retailer or supplier of goods or services, you need products liability insurance coverage. There are many possible scenarios but the risks of going without it fall into three major categories.

First category:

Firstly, there may be a flaw in the product itself due to the manufacturing process.

Second category:

Secondly, the product design may be unsafe.

Third category:

The third risk is in labeling or instructions about use. If a consumer does not understand proper use of the product – injury or property damage may occur and you may be held liable. A million dollars worth of coverage is recommended as a minimum for most small businesses.
Your business liability may include medical costs, lawyers’ fees, and economic, compensatory, and punitive damages. When acquiring product liability insurance, it is important, to be honest about your volume of sales and the scope of your business.
There are penalties for underinsurance and they are substantial. It is important to understand the extent of your responsibility, long before you are confronted with a lengthy, expensive lawsuit. Liability insurance may be expensive but is far less so than legal costs.
Find an insurance broker who is familiar with your industry and take his or her advice. In any event, don’t neglect product liability insurance.

Product Liability Insurance – It Pays To Be Prepared!

After research, I discovered quickly what product liability insurance is it is a protective cover that prevents manufacturers and sellers from prosecution, due to damages caused by the use of a product.
In the certain event that the manufacturer or distributor or merchant that sold the product is sued, the insurance handles the payment of the amount awarded by the courts and so averting financial loss to the defendant. So the

products liability insurance is considered a necessity for just about any type of business engaged in the task of manufacturing.

But still, there are provisions and limitations that may apply to just about any kind of product liability insurance.
Such as small business product liability insurance will include coverage that is similar to that extended to those of large corporations, although the amount of coverage that the smaller business can receive is usually significantly less.
We must still consider that there are a few variances that are based on the industry type and the amount of risk involved in the manufacturing of the product. For example, food product liability insurance is likely to be more comprehensive than business product liability insurance offered to companies that produce bedding or fabric.
So, a product is anything which is sold or given away. The product should be ‘fit for purpose‘ meaning it is safely serving its purpose for being in existence.
If you sell the product way downstream in a corner store, you may be sued first for a variety of reasons, one being you are the closest to the problem of that individual.
Your company’s name is on the product or your job is maintain or repair that product, some reasons that might put you in the bullseye of a lawsuit.
You are not sure who made the product or this manufacturer is no longer in business. These are two other reasons that could make you liable.
You may want to prove that the products were no good when you received them or that you gave the customers ample warning as a defense. When running a business you have more to worry about, than customers falling in your store.
You should get product liability insurance coverage from a company that specializes in your industry. Don’t wait until an event happens and something goes wrong with a product and someone gets injured. Just another expense of doing business. Premiums will vary on your insurance as they usually do depend on a variety of factors.

Why Product Liability Insurance Policy Is So Critical?

Business owners don’t usually consider the really bad things that could potentially happen in the life of their business, but the truth is that business owners are constantly facing the risk of potentially devastating situations coming up that could harm their business. The most common form of this type of situation is a lawsuit.

Businesses can face lawsuits for many different reasons like libel, slander, false advertising, injury, and defective products.

Now business product liability insurance is designed to protect businesses against lawsuits and claims of injury or damage to property arising from the use of products that have defects. If, for example, someone is using a product your business sold, and a defect in the product causes an injury or damages some property, your business could be sued.
Another example is if the product wasn’t defective, but the manner in which it was used caused an injury or damage, and there were no warning labels present to caution against the use of the product in that way.
It’s extremely critical to carry product liability insurance for any business that sells, distributes, or is otherwise involved in the manufacturing to sale process of a product.

Product Liability Insurance – Do You Need It?

Every day, thousands of products are sold to consumers around the world. The companies who handle these products – from manufacturers to exporters to suppliers – need to protect themselves with product liability insurance . Why?

Because if there are any claims of injury or damage by the consumer, the company will be liable.

Claims can arise from a variety of defects including design, packaging, or warranties. Even with stringent quality and safety checks carried out by the manufacturer, goods can slip through the supply chain with faulty components or lack of warning labels.
As well as bodily injury to a consumer, claims can also arise from the misuse of goods. Sometimes it is the consumer themselves that finds something unsafe about the product after purchase.

So, do you need product liability insurance?

If your company has anything to do with products, the answer is a resounding yes. Consumers are entitled to claim from anyone in the supply chain, not just the manufacturer, and any company found to be liable could be sued for thousands of dollars.
As well as peace of mind, it could be the difference between your company surviving or financial disaster in the event of a claim.

The Basics of Liability Insurance for Businesses

Small business owners bear a lot of burdens as they build their business. Much energy is poured into a business… and regrettably, even when you take extreme care with the work you do and the quality you provide, anyone can sue you for any reason.
There is nothing to stop a person from claiming you were at fault, and many business owners don’t plan for the possibility of business lawsuits. Consequently, they have no plan for responding to one, and when they are faced with a claim, they go out of business at the expense of the lawsuit.
For that reason, business liability insurance has a place in the market. Business liability policies exist to protect businesses from financial damage resulting from lawsuits and legal claims.
There are three main types of business liability policies I want to share with you today: General Liability Insurance, Professional Liability Insurance, and Product Liability Insurance.
General liability policies are broad coverage policies – they can protect a business from claims of injury or property destruction, as well as claims of slander or false marketing.

Professional liability policies are appropriate for service-based businesses.

This type of policy protects you from claims of errors, omissions of data, malpractice, and other service-related problems that can cause damage to your clients. Sometimes this type of policy is required by law, depending on the industry you provide service in.
Product liability policies protect a business that manufactures or sells products.
It protects a business in the event that a claim is filed by someone who was injured as a result of a product you manufactured or sold is defective. The person making the claim can be the person who bought the product, a person using the product, or even someone just standing nearby who was injured while someone else was using the product.

This type of insurance policy protects against the legal claims that can come out of defective products, or claims of defective products.

It’s important to check the options to protect your business… you never know when someone will file a claim against you, and it pays to be ready to handle that risk.

Typical Manufacturer Expenses Relating to Product Liability Coverage

Product liability coverage is intended to provide a financial safeguard for manufacturers and importers as well as for other vendors along the supply chain. Such policies protect against damage claims resulting from accidental property damage or bodily harm done by a product itself or a service that has been performed.
This type of coverage does not, however, protect against damage that is the result of intentional acts of a vendor or manufacturer or events that were foreseeable by insured parties.
It is also important to note that this type of coverage does not extend protection when it comes to liability for damages that are already under the umbrella of another contractor for which the vendor or manufacturer bears responsibility via disability statutes, unemployment compensation obligations or worker’s compensation law.
There are those who are of the opinion that expenses resulting from the purchase of products liability insurance ought to be an excludable cost because such coverage works to protect customers who might otherwise be held liable for damages caused due to how the manufacturers’ products are used.
Such manufacturers routinely argue that without such insurance coverage, customers would refuse to purchase their products. Thus, manufacturers contend that product liability coverage should properly be viewed as a delivery cost, given that it is essentially a prerequisite for any sales to occur.
The fact remains; however, that because costs pertaining to the transport of goods along the supply chain from maker to vendor are not considered to be directly related to the delivery of goods to the end customer in the sales transaction, they are not rightly excludable from the sales price for tax calculation purposes.

This type of insurance is typically bought by manufacturers in advance of the goods being shipped from a factory for eventual receipt by customers.

Just because customers are generally unwilling to accept things such as firearms or other potentially dangerous items in the absence of a product liability policy, that does not mean that the cost of such coverage should be seen as an excludable expense related to the act of delivery itself.
The bottom line is that product liability coverage is something that exists to protect the manufacturer of a product as well as vendors down the line of distribution. The expense itself is not one that arises directly from the act of delivery to customers.
For that reason, the cost of a product liability insurance policy is designated as an expense that pertains to manufacturing and/or sales, and is, therefore, not to be removed from the final price of shells, cartridges or firearms themselves.

3 Situations Invoking the Need for Small Business Product Liability Litigation Protection

No one ever thinks of small business general liability insurance as a fascinating subject, but the truth is that there are so many benefits to consider. Business owners most commonly facing litigation issues due to a lawsuit claim need to be protected. Legal claims can happen for many reasons such as libel, slander, and even false advertising.

Depending on the type of business you have, you may need a different type of insurance coverage.

Another type of insurance policy called Small Business Product Liability Insurance is designed to protect manufacturers, distributors and importers against lawsuits and claim of injury or damage to property arising from the use of product that have defects.
If, for example, the product was not defective but the manner in which it was used cause injury or damaged, and there were no warning label present to caution against the use of the product in that way.

Here are three situations that can come up, that might invoke a lawsuit and business would find protection from using their product liability insurance:

  1. One of the most common claims about product liability is that a product your business manufactured sold, refurbished, distributed cause damage or injury, liability for this product can come back to you.
  2. Another claim about product liability is that a product your business manufactured sold, refurbished, distributed had a flaw in that design of a product cause damage or injury because of that flaw. Even if you were not manufactured the product, you can be held responsible for the problems occurred.
  3. If a person uses the product in a wrong way, and warnings were not included cautioning against that use, you can be held liable for any damages that result. Product liability is a real benefit to a business to get a product liability insurance. Sometimes general liabilities also cover some product liability, but other times business has to specifically get a product liability insurance.