Product Liability Insurance
Irvine, Orange County, California

Product Liability Insurance provides serious financial protection for any business that manufactures or sells products, food, medicine, or other goods. This can protect you against liabilities that are caused by malfunctions or defects in your products that cause injuries to others, or damage their property. It can also cover you if you fail to properly warn your customers about potential dangers from using your products.

What does Product Liability Insurance Cover?

Product Liability Insurance can help protect you from claims that arise from:

  • Manufacturing or production flaws

    that cause unreasonably unsafe defects in the product. For instance, there may be traces of dangerous chemicals in your product, which could be toxic to those using it.

  • Design defects

    that make the product unsafe for use by the public.

  • Inadequate defect warnings

    or instructions for using the product. These claims arise when products are not properly labeled or had warnings that were not explanatory enough to reduce consumer risks while using the product.

  • Depending on the outcome of the case,

    money may be awarded to the party that filed the claim for compensatory loss (including medical costs, economic damages and attorney’s fees) or punitive damages (designed to deter the defendant from repeating the action that caused the damage). At times, these cases can put organizations out of business because the awarded damages are so large.


Why Purchase Product Liability Insurance?

Even if you do not physically manufacture a product, you may be at risk for litigation. The actual manufacturer is not the only party liable for product flaws, defects and failures; retailers, wholesalers can also be found negligent.

There is a stream of commerce that a product goes through from its inception to the hands of the consumer. If your organization had any part in that stream, and as long as the product was defective when it left your control, you can be held liable for any problems that arise.

Generally, there is limited product liability protection under a CGL policy, yet it may not be enough coverage to adequately protect your business. It is wise to discuss your policy in depth with ISU-ERM Insurance Brokers to learn more. Premiums are based on the type of products sold, volume of sales and the role of your organization in the stream of commerce. Properly identifying products in your policy will ensure adequate protection at a fair price.

Limiting product Liability

ERM Insurance Brokers understands the risks your business may face. We can help you develop a solid risk management plan to limit your exposure to product liability pitfalls. Be sure to check out our blog where we also provide helpful tips. Call us at (949) 222-0444 to learn more about individual solutions to help protect your business financially.