Product Liability Insurance And Its SignificancePosted by: Damon Webster | Posted on: April 7, 2020
Liability insurance protects inventors, manufacturers and sellers of faults and defects in any product available to the public. Without protection, your business can be responsible for medical costs, compensation for damages, economic damage, punitive damages, attorney's fees.
These damages and fees, depending on the number of people affected, you can put a business in bankruptcy. With a simple product responsibility coverage , a company can protect itself from most or all of these costs. A policy covers liability for product:
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Recently, some Chinese manufacturers produce plastic children's toys for lead. Multiple parties would be responsible for the failure in the production of this product. Manufacturers could be used to produce the product in the presence of hazardous chemicals. The point of sale or the seller can be held liable for selling a product that is not safe for the end user.
Inadequate warnings include unwanted side effects of a product that is not labeled correctly / explained. An example of this could include cereals produced in a plant that also processes peanuts. The cereal could physically harm individuals allergic to peanuts.
The cereal can be produced from a source containing no trace of peanuts, but can add production peanut residue cereal. Without sufficient warning, a hypoallergenic consumer is vulnerable to cereals and the company is responsible.
A design flaw can be something as simple as a handle breaking a cup of hot coffee for an airbag not to deploy in an accident. In both situations, the company responsible for your product does not perform as advertised.
Basically, if your company is involved in producing or selling a product, then your company needs protection through product insurance. Not worth the risk, a case of responsibility can destroy a company.