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What Is Product Liability Insurance And What It Covers?

Indeed you have created a great product. However, what if that product causes injury to the customer or results in damaging the customer’s property? It can happen – and it has happened with many companies. For example, a few years ago, instances of smartphones of a particular brand catching fire were quite prevalent. That brand got sued by many. Imagine something happening with you as well? Because while as great as your product is, you can never be sure if things can’t go wrong. This is where – and for what – you need product liability insurance.

Product liability insurance provides coverage against legal liabilities that result from your product causing accidental physical injury to a third party and/or accidental damage to the property of the third party. In case if anyone sues you for your products for the said reason, the insurance will pay for the legal charges you would incur in defending yourself at the court. The insurance will also pay for the medical costs of the third-party. And if there’s a need to pay compensation, the product liability insurance covers that as well.

Product Liability Risk


The coverage – and the extent of the coverage – varies for different product liability insurance plans. So, when you’re buying the policy, it’s important to have a clear understanding of its terms and conditions so as to be aware of what it covers and what it excludes. Also, at the same time, the cost of different plans from different insurers may vary widely. So, you also have to consider where you’re buying the insurance from.

Especially if you don’t have enough experience buying business insurance policies, you should ideally seek help from licensed insurance brokers. These experts can not only help you understand product liability insurance and the policy’s coverage terms, they can assist you with the buying process as well. Consult them, learn more about the policy, establish your exact needs, compare different plans, customize the plan if needed, and then make your purchase.

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