Food and drink insurance, food and drink industry insurance

Product liability insurance

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Product liability insurance for manufacturers

Product liability means that manufacturers or sellers of goods have a legal responsibility to compensate buyers, users and even bystanders for damages or injuries they suffered because of defects in goods purchased.

The Consumer Protection Act 1987, outlines strict laws concerning selling or manufacturing faulty or defective products. This means that if there was a defect in a product you produced then you would automatically be liable for any harm caused by that defect, whether or not you were at fault.

This cover is usually combined with public liability insurance.

Key features and benefits of product liability cover

  • Protection for your business and reputation
  • Cover for claims against faulty or defective products
  • Cover for third party liability claims
  • Advice on required limits of indemnity as part of a wider cover placement
  • Compensation costs
  • Legal defence costs

Get product liability insurance now

Get in touch with an insurance expert to get a product liability insurance quote today.

What does product liability insurance cover?

Product liability insurance can protect you against the cost of compensation for:

  • Third party liability arising from death, injury or damage as a result of a faulty or defective product including packaging. 
  • Protection from design flaws.
  • Coverage for defects in the manufacturing or production process - errors that result in dangerous product problems.
  • Defective warnings or instructions - if the product was not properly labelled or that the warnings were insufficient for the consumer to grasp the risk.

What's not covered?

  • Contractual obligations are absent, e.g. if you don’t have fire extinguishers in your facility, which is required by law, the corporation may deny your claim for fire damage.
  • Injuries resulting from mental anguish, loss of reputation, slander, and other comparable circumstances.
  • Costs incurred as a result of a product recall.
  • Pollution-related liability.
  • Damage is done intentionally.
  • Unlawful personal gain.
  • Acts of dishonesty.
  • Financial losses to you or your business caused by your faulty or defective product.

Employers’ liability insurance

Compensation or legal fees from claims made by employees who are injured or become ill as a result of working for you is not covered under product liability insurance. Employers liability insurance covers you for this and is usually a legal requirement for businesses with employees.

Public liability insurance

A public liability insurance policy protects your business if a member of the public takes legal action for damage to their possessions, an injury, or death as a result of your negligence. This insurance cover is vital for any business that has interaction with the public.

Product recall insurance

Product recall insurance is a specialized type of insurance policy that provides coverage for the costs associated with recalling a product from the market. It helps mitigate your financial risk if one of your products is found to be defective or unsafe and must be recalled.

Not sure whether you need product liability insurance? 

Give us a call or get in touch online to discuss what kind of cover you need.

Why choose us for your product liability insurance?

Our team have a lot of experience placing this cover for manufacturers, wholesalers and retailers and can assist businesses that export worldwide. We can also advise on required limits of indemnity as part of a wider cover placement.

Machinery damage and breakdown insurance

MACH 3-5-7 is specifically designed for operators of industrial and commercial machinery. It runs alongside your general insurance, not as a replacement, and provides far wider cover including operator error for a period of up to 7 years.

Trade credit insurance

Non-payment can be a significant risk for any business trading on open credit terms. Trade credit insurance helps mitigate this risk. It can cover any business dealing on credit terms, whether supplying goods, providing services or operating in a contracting environment. 

Cyber insurance

Specialist cyber insurance

Cyber insurance can help a business recover losses and associated costs resulting from large-scale breaches, business interruption, ransomware and other types of cyberattacks.
 

Product liability insurance FAQs

If your business makes, sells or supplies a physical product, this insurance cover is for you. No matter how thoroughly you’ve tested each product, there still could be dangerous effects that can unknowingly appear. This is where the importance of product liability insurance comes in to provide comprehensive protection for design flaws that could be potentially dangerous for users.

Every business is different, so it's down to you to decide how much cover your business requires.

You should consider the level of risk that your business faces. Our advisers are available to talk you through your options.

The cost varies on the type of products sold and volume of sales. Both public and products liability provide coverage for third party injury or property damage that you might cause. Public liability relates to injury or property damage to visitors or caused to third parties whilst you are working away from your premises. Products liability relates to injury or damage caused by any products you distribute, supply or manufacture.
  1. The product had an "unreasonably dangerous" defect that injured you as a user or consumer of the product. The defect can come into existence either in the design of the product, during manufacture, or during handling or shipment.
  2. The defect caused an injury while the product was being used in a way that it was intended to be used.
  3. The product hadn't been substantially changed from the condition in which it was originally sold. "Substantially" means in a way that affects how the product performs.
Take steps such as transferring risk through supplier management, implementing robust quality control with record keeping, actively soliciting and reviewing customer feedback, and integrating safety into the product's design.