Is Product Liability Insurance Important For My Small Business?
If you do not currently have Product Liability Insurance and your business sells, imports, distributes, handles, repackages or repairs any goods- then you may be at serious risk.
Product Liability Insurance protects your business from any financial loss relating to claims and legal costs for actual, or alleged personal injury or property damage as a result of any products you sell - or any goods that you service/repair.
What is it?
When customers purchase a product from your business, there is a minimum expectation that it will operate in the way it has been advertised to. It should be safe to use, free from defects and should not damage anyone or anything while in use.
This also applies to certain services. It's important to note that products also include your workmanship. This means any goods that you and your business have serviced or repaired. For example, say your company provides a service of repairing shoes. You've just repaired a pair of heels for a customer but she comes back two days later saying that her heel snapped and she suffered personal injury- this would be product liability and you would be required to compensate for the damages.
We know that even after extensive research, development and quality checks, things can still go wrong. This is where Product Liability could save you from serious financial hardship by helping to rectify any issues that arise as a result of a faulty product. Even after your business stops selling a product, you are still liable for any injuries or damages that occur because of it. If you do come to realise that your product is in fact harmful or dangerous, Product Liability Insurance can include the costs and expenses to recall these goods.
When things go wrong with your product and your customer suffers personal injuries or property gets damaged, it is likely that your customers will look towards your business for compensation.
This could result in financial loss, legal costs, out of court settlements or court awards. Along with the monetary loss, you and your business also risk a damaged reputation- even if the allegations aren't true. A Product Liability Insurance policy provides financial security against the unknown.
What Does Product Liability Insurance Cover?
1. Insurance against manufacturing faults
2 .Insurance against design defects
3. Insurance against incorrect warnings or instructions
If you're unsure wether Product Liability Insurance is for you, reach out to your local broker today. You may be at more of a risk than you think but to be sure, it is always a great idea to reach out to an insurance specialist so they can help you navigate this situation and ensure that you and your business are safe.
General Advice Warning
The information provided is to be regarded as general advice. This type of insurance product is designed for small and large businesses, who want to be covered against financial loss due to injury or damage arising from goods or products sold, imported, manufactured, installed or repaired, resulting in a product liability claim. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider relevant product disclosure statement(s) before making any decision to purchase this type of financial product.