Product Liability Insurance in Hillsborough

If you have a business that sells, designs, manufactures or alters products, you run the risk of that product failing and causing unforseen injury or property damage. When your product has caused harm to a person or property there are some financial tolls you can incur. And the costs associated with injury or property damage can be extremely high, even crippling to your business. But how can you protect yourself and your company in such a case? This is where product liability insurance comes in handy.

Product liability insurance helps you pay for some of these major costs. This is why it is so important to invest in product liability coverage if you have a business that sells products whether you are a supplier, retailer, or manufacturer.

What is Product Liability Insurance?

Product liability insurance is used to cover the costs associated with a product causing injury or property damage. These costs can include legal fees for a defense lawyer in the event of a lawsuit, medical bills for the injured party, paying damages for property, or even an out of court settlement.

For example, let’s say you own a bike manufacturing company. This company makes road bikes for cycling enthusiasts.

Unluckily, while riding one of your road bikes, a customer is thrown from the bike, breaking their arm, when a defect occurs causing the bike chain to catch. The customer decides to sue your company for the medical bills from their broken arm.

Fortunately, you decided to get product liability coverage. Your insurance helped your company pay for your defense attorney in the case. When both parties decided to settle out of court, your insurance helped cover the cost of the settlement. This is the benefit of having product liability insurance.

Defective product covered by product liability insurance in Hillsborough

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What Does This Insurance Cover in Florida?

Now you have an idea of what product liability insurance is, but what exactly does it cover? What is actually covered in a product liability policy can differ depending on the specific details of that policy, but there are some general items a policy will usually cover.

A typical product liability policy may cover:

  • A property damage or injury lawsuit
  • Injuries to third parties
  • Foodborne illness
  • Illness from toxic products
  • Wrongful death
  • Manufacturing defect claims
  • Design defect claims
  • Marketing defect claims

As mentioned above, each policy can differ depending on the specific details. Be sure to speak with your insurance agent regarding any questions you may have about a policy.

Another important thing to be aware of when it comes to product liability insurance is what is not covered by your policy. Often times, claims that are excluded by product liability coverage may be covered by different kinds of small business insurance.

The types of claims that are typically not covered by product liability insurance can include:

  • Professional negligence: This is usually covered through professional liability insurance.
  • Losses from product recalls: If you have suffered costs due to a product recall, you will need product recall insurance to help cover these losses.
  • Injuries to employees: Workers compensation insurance is generally required for most businesses and is used to cover work-related employee injuries.
  • Slip-and-fall accidents on your premises: If you have general liability insurance, this should help protect you against slip-and-fall claims.
  • Inventory losses: If you suffer a loss to inventory due to a product defect, this is not covered by your product liability insurance.

If you have any questions about what is not covered by your specific product liability policy, be sure to go over the details with your insurance agent.

3 Types of Product Defects

If you are facing a product liability lawsuit, you are probably being sued over a product defect. There are many different product defects that can occur, but they usually fall into three general classifications:

  • Design flaws
  • Manufacturing flaws
  • Advertising flaws

A defect is considered a design flaw when faults in the design of a product make it potentially harmful to consumers. A manufacturing flaw occurs when there is an issue with the way a product is made or its individual parts. Finally, when a company provides inadequate product warnings or erroneous directions, this is considered an advertising flaw.

Most product liability lawsuits will be based on product defect in one of these three categories. It is important to note that you can still be sued even if you were not responsible for the specific flaw. For instance, a manufacturer can be sued over a defective bolt from a supplier used in the manufacturer’s product.

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How Expensive Is Product Liability Insurance?

One of the biggest questions on everyone’s mind when thinking about getting product liability insurance is just how much does coverage cost? The simple answer is that policy costs vary depending on your specific circumstances and needs.

Policies can differ in costs based on factors, such as:

  • The products and services sold
  • Your industry
  • Your revenue
  • The size of the business

Typically your product liability insurance will be included in your general liability insurance. On average, general liability policies cost between $500 and $600 per year. However, if you are a manufacturer, costs for general liability policies tend to run a little higher due to and increased likelihood of a liability lawsuit. Manufacturers can expect to pay anywhere from $400 to $1,000 per year.

Keep in mind that these costs are not finite and will vary from business to business. For more information on the costs of product liability insurance or general liability insurance, speak with your insurance agent.

Call Talley Insurance If You Need Product Liability Insurance

The fact of the matter is running a business that manufactures, supplies, or retails goods comes with an inherent risk of being caught in a product liability lawsuit. Without proper product liability insurance, you could end up paying thousands out of pocket for damages, legal fees, and compensations.

Why take that risk when there is a simple and easy way to protect yourself from such a situation? Speak with an independent insurance agent today about getting product liability coverage for your business.