Product liability insurance has become one of the most sought-after insurance products in the world, with the new wave of mass production that is being complimented with mass consumption, manufacturing companies are now increasingly exposed to big lawsuits and massive class action cases that may arise when manufactured products hurt consumers in any way thinkable.
Due to the complexities that may arise with product liability claims, businesses are also getting smarter about choosing the right insurance products. Here are few questions that should be asked by any business exec before choosing product liability insurance.
What exactly does product liability protect against?
Product liability insurance will protect you against any liabilities that may arise from the use of the product manufactured by your company. It covers you against compensations awarded when damages arise through the use of your product. It also covers against unforeseen circumstances, which may include product faults (remember the Toyota product recall).
How much premium will I have to pay?
Premiums always vary, it is usually calculated based on the amount of risk exposure, number of employees, the location of your business and the recent history of accidents or similar incidents that might have or have led to law cases. As a business owner or representative you have to make sure that the premium, you will be paying for an insurance product will be commensurate with your financial strength.
How safe are we?
Instead of exposing yourself to high premium rates, you should make sure that your company is following industry safety standards, recruiting experienced workers and procuring best industrial equipment, so that your chances of being liable will be minimal.