Product Liability Insurance

Insurance for Small Business Owners

Product liability insurance covers the cost of compensating anyone who has been injured or had their property damaged by a faulty product that your business designs, manufactures or supplies.

It comes as part of a packaged product along with public liability.

Key Features and Benefits

• We can cover a wide range of policy limits to suit your needs and can cover £10 million plus through excess layer policies.
• £250 court attendance costs per day to defend a claim.
• Access to a 24-hour legal helpline.
• Legal costs of up to £1 million for claims of accidental bodily injury, loss or damage to third party material property, or wrongful arrest in connection with the business.
• Legal costs/expenses in connection with alleged breach of statutory duty under health and safety, consumer protection or food safety legislation.
• Legal costs in connection with criminal inquiry into manslaughter/corporate manslaughter, culpable homicide or corporate homicide.

What is Product Liability Insurance?

Taking out a product liability insurance policy can help cover the costs of compensation for:

• Injuries caused by a faulty product.
• Loss / damage to property caused by a faulty product.
• Product faults unidentifiable by your quality control system.

You can be held legally responsible for faulty or defective products even if you didn’t manufacture them. You may be expected to pay out for compensation if:

• Your business’s name is on the product.
• Your business repairs, refurbishes or changes a product.
• You imported the product from outside the European Union.
• You cannot identify the product’s manufacturer, or the manufacturer has gone out of business.

Even if your business doesn't manufacture the product but you distribute it, your product liability insurance policy can cover you if you can prove that:

• The products were faulty or defective when they were supplied to you.
• You gave customers safety instructions, including warnings about misuse.
• You included terms for the return of faulty goods to the manufacturer.
• Your supply contact with the manufacturer covers product safety, quality control and returns.

What is Not Covered?

• Faulty or defective products that are a result of bad workmanship.
• Financial losses to you or your business caused by your faulty product.
• Costs incurred to repair, remove, replace, reapply, rectify or reinstall products.
• Costs incurred to recall or rectify products supplied.
• Advice, instruction, consultancy, design, formula, specification, inspection, certification or testing performed or provided separately for a fee or under a separate contract
• Personal accident if you’re injured as part of your business activities or in your spare time.
• Compensation or legal fees from claims made by employees who are injured or become ill as a result of working for you (see employers liability cover). 
• Loss or damage to your own property and equipment as a result of your business activities.

Quotes from well-known and specialist insurers, including: