What Is Product Liability insurance?
Product liability insurance is a type of business insurance that provides financial backup against claims for loss as a result of a defect product sold that causes injury or bodily harm. you can see more about the definition on wikipedia. They are 5 major types of business insurance and product liability insurance is one of the paramount ones among them. For example, a clothing or fashion store would have far less risk than a small appliance store.
For example, a fashion store would have far less risk than a small electronic appliance store. do i need product liability insurance? yes, you need product insurance to cover your small business when there is a claim against your business product.
Who And What Type of Business Needs Product Liability Insurance?
Companies that are into
- Product Manufacturing
- Product wholesale
- Product Distributing and
- Product Retailing
Are the type of businesses that needs product liability insurance since they are liable for the safety of their products at each level until it gets out of their hands into the hands of the next person in the product distribution chain. For example, a clothing or fashion store would have far less risk than a small appliance store.
- Product Manufacturing Business:
Businesses that are termed as Product manufacturing are business establishments that refine or produce a fine product out of raw materials. During the time of production, some raw materials used in making products can cause bodily injury or harm, so in this case, the company will need to have a product liability insurance cover as a financial backup if any said incident occurs as in the process of production.
- Product wholesale business:
The product wholesale business is any business that connects Product manufacturers with product retailers. Meaning, they buy from manufacturers and sells to the retailers to make profit. Now, in the course of handling products gotten from the producers, those products can cause harm or injury to people which will require money to fix the damage; so in such case, businesses operating on the level of reselling to retailers should product liability insurance for their business. You can contact your insurance agent or broker for better explanation
- Product Distributing Business:
This set of business set ups produces and sells directly to the final consumers and it breaks the chain of product distribution. Just like other types of product liability insurance, the goods at this level can cause harm or damage to people. So Product liability insurance is needed.
- Product Retailing Business:
In the product distribution chain, the Retailers connects the final consumers with the producers. They sell directly to the final consumers where it ends. Liability insurance is needed by retailing businesses to provide financial back up if product causes injury or harm.