Product Liability Insurance Helps Insure a Great Life

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Product Liability Insurance

Whether you purchase and use products as a consumer, sell products as part of your business model or manufacture products for businesses and consumers, then it is important to understand how product liability insurance helps insure a great life.

For certain, consumers assume a certain level of guaranteed safety with every product (i.e., autos, furniture, food, medicine, appliances) purchased. Businesses which sell products take on the responsibility for the safety of same. However, the product manufacturer is also liable to ensure the product is not misrepresented and is delivered without error or defect.

Today we’d like you to join us as we turn the lens on product liability insurance.

Product Liability Insurance outlined…

Frequently, we read or hear news headlines that serve to alert us about a recalled product. Recalls occur so often that the United States Consumer Product Safety Commission (CPSC) maintains a recall list where one can see the latest recalled products, search for product information, or report an unsafe product.

So, what is product liability insurance? As always, the Insurance Information Institute (III) offers an easily understood description for this product. They offer:

“If your company designs, manufactures, distributes or sells a physical product—anything from toys to building supplies to macaroni and cheese—you’ll want to strongly consider purchasing product liability coverage. This coverage helps provide financial protection in the event that the use of your product results in property damage, personal injury or death.”

III advises you to consider these factors:

  • Product design, manufacturing, assembly and packaging
  • Directions, warnings and flawed marketing
  • Partner, investor and affiliate relations

It is important to understand product liability insurance coverage can vary by state, just as product liability laws vary by state. According to Find Law’s website:

“There is no federal product liability law. Typically, product liability claims are based on state laws, and brought under the theories of negligence, strict liability, or breach of warranty. In addition, a set of commercial statutes in each state, modeled on the Uniform Commercial Code, will contain warranty rules affecting product liability.”

Our own State of Tennessee discusses this very point on page 15 in the insurance and bonding section of their Tennessee SMART START guide.

We invite manufacturers to contact the John Bailey Insurance Agency

Over the past year we have discussed in great detail critical items to consider for your commercial business insurance coverage. As well, we have written about insuring your home-based business. So, it follows that whether or not you, as the manufacturer, create the product in your home or manufacturing plant, product liability coverage should be considered for your commercial business policy package.

Manufacturers who want to insure a great life, should remember:

  1. If you have suppliers contributing parts or ingredients for your end-product, they too should have product liability insurance.
  2. You should request to have your company named as an additional insured on your suppliers’ product liability policies.

Of course, the first step should be to plan a meeting with our team to discuss your options.

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Author: Brandon

Farragut High Grad, Ole Miss Rebel, Certified Insurance Counselor – CIC, Specialty Insurance Lover, Past Outdoor Insurance Underwriter, Co-Founder successes – Young Professionals of Knoxville, Knoxify.com, 2011 Dogwood Arts Festival Co-Chair. Lucky husband and dad to 3 sweet girls.

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