Product Liability Insurance for Small Businesses

Insurance for Small Business Owners

Product liability insurance covers the expenses associated with compensating individuals who have been injured or whose property has been damaged due to a faulty product that your business designs, manufactures, or supplies.

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

Key Features and Benefits

• Cover for a wide range of policy limits to suit your needs. Cover for £10 million plus is available through excess layer policies. 
• £250 court attendance costs per day to defend a claim.
• Access to a 24-hour legal helpline.
• Legal expenses up to £1 million for claims for accidental bodily injury, third-party property damage, or wrongful arrest associated with your business activities.
• Legal defence costs/expenses related to accusations of violating health and safety, consumer protection, or food safety regulations.
• 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 to pay compensation costs for:

• Injuries caused by a product supplied or manufactured by you.
• Loss / damage to property caused by a product supplied or manufactured by you.

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 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. If you have staff, employers liability insurance is a legal requirement. 
• Loss or damage to your own property and equipment as a result of your business activities.