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Product Liability Insurance is a type of insurance coverage that provides protection to businesses in the event that their products cause harm or injury to consumers. It is designed to cover legal expenses, settlements, and judgments associated with product-related claims.


This type of insurance is particularly important for manufacturers, distributors, and retailers who produce or sell goods to the public.

Product Liability Insurance

Coverage for Bodily Injury or Property Damage

Product Liability Insurance covers claims for bodily injury or property damage caused by a defect in the insured's product. This can include injuries resulting from manufacturing defects, design defects, or inadequate warnings or instructions.

Manufacturers, Distributors, and Retailers

The coverage is relevant to various entities involved in the production and distribution chain, including manufacturers, distributors, wholesalers, and retailers.

Legal Defense Costs

The insurance policy typically covers the costs associated with legal defense, including
attorney fees, court costs, and settlements or judgments related to product liability lawsuits.

Coverage for Faulty Design, Manufacturing, or Warning

Product Liability Insurance may cover claims arising from faulty product design, manufacturing defects, or inadequate warnings or instructions.

Completed Products vs. Products-in-Progress

Coverage may extend to completed products as well as products still in progress. This can vary depending on the specific policy and the nature of the insured's business.

Limits and Deductibles

Like other insurance policies, Product Liability Insurance has coverage limits, which represent the maximum amount the insurer will pay for covered losses. Deductibles may apply, representing the amount the insured must pay out of pocket before the insurance coverage kicks in.


Policies may have exclusions specifying situations or types of claims not covered by the policy. It's important for businesses to understand these exclusions.

Risk Management Practices

Implementing strong quality control measures, product testing, and safety protocols can help businesses minimize the risk of product defects and subsequent liability claims.

Recall Expense Coverage

Some policies may offer coverage for the expenses associated with product recalls, including notification costs, transportation costs, and disposal costs.

Retroactive Date

Policies may have a retroactive date, indicating the date from which coverage begins. Claims arising from incidents that occurred before this date may not be covered.

Product Liability Insurance is essential for businesses involved in the production and sale of goods, as it helps protect against the financial consequences of product-related claims. While businesses strive to produce safe and reliable products, unforeseen issues can arise, and having insurance in place is a crucial risk management strategy. Companies should carefully review policy terms, conditions, and exclusions and work with insurance providers to ensure that they have appropriate coverage for their specific products and industry.

Annagard Insurance Agency is always here for all your insurance needs. Please feel free to call us at any time, we will be delighted to speak with you.

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