Product liability is an often-misunderstood area of insurance, due in part to the fact that many general liability policies do carry at least some public liability coverage. As a result, it’s easy to go without this coverage when it could be vital to protecting your business. Remember, your general liability insurance covers a broad range of risk areas, and its policy maximum is spread across them. If you manufacture products or sell products built by others, that might result in under-insurance in this area unless you buy specific product liability coverage to provide additional protection in this area.
Deciding Whether You Need the Extra Liability Coverage
So who needs product liability insurance? Obviously manufacturers and retailers whose exposure to potential risks in this area is daily. Realistically, though, any company that makes or sells items could find themselves needing coverage. This includes retailers selling products made in house, as well as many types of restaurants and some craftsmen and contractors. In addition to the commonly perceived risks like incomplete warning labels or shoddy workmanship, this coverage also provides funds to protect yourself against slander and libel campaigns relating to your goods. When you consider those risks are often excluded in general liability policies built on a one-size-fits-all principle, it’s easier to see why it’s often a good idea to invest in a policy.