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Product Liability Insurance
Protect your small business from product-related claims
What is product liability insurance?
Product liability insurance protects your business from damages caused by products you manufacture, sell, or distribute. It can also apply to services you provide, like HVAC installation or roofing . In many cases, it helps with claims that occur after work is complete. This coverage, also known as products completed operations, is typically included in general liability insurance .
Progressive Commercial provides the expertise and flexible options you need to protect your business with product liability coverage. Get started with a quote or connect with an agent to learn more.
Who needs product liability insurance?
Businesses that make or handle physical items should consider product liability insurance to protect against claims related to unsafe goods. It's common for companies that do things like:
- Sell products to customers in store or online
- Create unique parts
- Build items using parts from different suppliers
- Rebrand or package another company's goods
- Install or repair equipment as part of their service
Many professions can benefit from this type of protection, such as:
- Distributors and wholesalers
- Manufacturers
- Retailers
- E-commerce businesses
- Construction companies
- Electricians
- Handyman businesses
- Tile and flooring installers
Essentially, if your business creates, sells, or installs products, product liability insurance offers an important layer of protection. It helps cover financial losses if an item you handle causes harm to others, whether you're working with large companies, government agencies, or the public.
What does product liability insurance cover?
Product liability insurance protects your business if a product or service you provide causes injury, illness, or damage to someone else. It can help with legal fees and claims related to:
- Bodily injury: Pays medical expenses if a product injures a customer or gets them sick.
- Property damage: Covers damage to someone else's home or belongings.
- Defective products: Helps with manufacturing errors and design flaws.
- Marketing defects: Covers issues related to improper labeling, missing instructions, or unclear safety warnings.
Coverage also applies to service-relatedrelated products after the job is complete. For example, if a toilet installed by your plumbing company leaks and causes damage to a client's home, product liability insurance coverage can help pay for repairs.
Insurance for product liability extends to items in a supply chain. For instance, if you design something that's manufactured elsewhere and a defect leads to customer injury or illness, you could still be held responsible. In that case, your policy could help cover your legal expenses.
What doesn't product liability insurance cover?
Product liability insurance doesn't cover every scenario or risk associated with your goods and services. Exclusions include:
- Quality control issues: Insurance companies might not cover claims related to issues or product defects that a business knew about but didn't address.
- Employee injuries and illnesses: If a product harms one of your workers, product liability coverage would not pay their medical expenses and lost wages. Instead, those claims would fall under your workers' compensation insurance .
- Product recall costs: Product liability insurance doesn't typically cover recall costs, which can include notifying customers and disposing of the recalled product. However, you might be able to add product recall coverage to your insurance policy.
How product liability insurance for small businesses works
Small business product liability insurance works to minimize financial losses when manufacturing, selling, or distributing products. If a customer claims your business's products cause bodily harm or property damage, this coverage can help.
After an accident occurs, the injured party may file a claim against your business. Once you notify your insurance company about the claim, they'll investigate to see if the product was at fault. You can expect them to ask questions about:
- How the product caused damage
- Whether it was used as intended
- What disclaimers and instructions came with the product
If the product was responsible, your insurer can cover the cost of the claim up to your policy limit.
Manage your risk with recordkeeping
Keeping detailed documents about your product's lifecycle is a helpful business practice in case of a product liability claim. Good records can demonstrate that your product was manufactured with high standards and concern for your customers' well-being.
How much does product liability insurance cost?
Product liability insurance rates vary by industry. Insurers use several factors to determine your cost, including:
- Type of product
- Consumer base
- Sales volume
- Manufacturing process
- Claims history
- Years in business
Your coverage amount can also affect your premium. Higher coverage costs more, but it provides increased protection in case of a claim. Be sure to take your product's entire production cycle into account when choosing your insurance limits.
For an accurate picture of how much product liability on a general liability policy costs, talk to an agent or get an online product liability insurance quote.
Common questions about product liability insurance
How much product liability coverage do I need?
The amount of coverage you need depends on the type of products you work with, the size of your business, and the risks you face. At a minimum, you need enough coverage to protect your assets in case of lawsuits or other product-related claims.
Is product liability insurance required by law?
It depends on the type of product, where you live, and other factors. Some products, such as medicine and food, may be subject to federal or state regulations. Clients and landlords may also require product liability coverage as part of their contracts. Even if it's not mandated, this insurance offers important protection for your business.
Do I need product liability insurance if I only sell online?
You should consider it. No matter where you sell your products, your business can be held responsible if they cause damage or harm. Product liability coverage can protect your e-commerce business if you sell online.
Why choose Progressive Commercial for product liability insurance
Small businesses like yours have trusted Progressive Commercial for over 50 years. We provide flexible options, competitive rates, and expert service. To get started with a general liability policy that includes product liability coverage, get a quote online. You can also call to speak with one of our in-house business insurance agents for help finding coverage that protects you now and in the future.
