Firearms Insurance Agent Blog

The Importance of Product Liability Insurance

If you’re a company that manufactures a product available to the public, you need to have product liability insurance.

Every business that manufactures or sells a product is responsible for injuries or deaths caused by its products. That means, if one of your company harms an individual, you can be held liable.

Lawsuits can put companies out of business—it’s as simple as that. If your company is a $2 million dollar company and you get sued for $50 million (and the claimant(s) win), you’re done.

But why would you get sued?

Unsafe defect from production

First, a person or group may claim that a part of the production process created an unreasonably unsafe defect in the product. This doesn’t have to do with the design (more on that below) so much as an error that occurred while the item was being made. The error could have been made to just one item or several.

Unsafe due to improper design

Another reason you can get sued is that an individual or group may claim a product is inherently unsafe due to improper design. Unlike the situation above, this would apply to all products of a particular design, not just a few.

Insufficient warnings and/or labels

Finally, an individual or group may claim a product was not properly labeled or had insufficient warnings. Have you ever seen those warnings on a coffee cup letting you know the beverage is hot? Many people scoff at these warnings, but they’re the result of a lawsuit where someone claimed the coffee did not have proper warnings/labels.

Whether or not the claimant is correct in their claim, companies need to protect themselves from major lawsuits that could potentially put them out of business. Manufacturers, retailers and wholesalers should secure product liability insurance coverage, which protects them against financial loss should they be sued. In order to obtain proper product liability insurance, please call 877-776-4015 and Associated Services in Insurance can connect you with the right insurance company (or companies) that can provide you appropriate product liability insurance coverage for peace of mind.