All You Need to know About types of Product Liability Insurance Claims

Small firms might face serious consequences if they release a defective product into the marketplace. Product Manufacturers, Distributors, Wholesalers, and Retailers can be held liable for the damages caused by the usage of their products and an adverse judgement by the court might severely impact the financial position of the company. Hence, it is important to purchase a Product Liability Insurance Policy.


What are different types of Product Liability Claims?

There are 3 common types of Product Liability Claims:

  1. Manufacturing Defects: Manufacturing Defects are the most common type of product liability claim. Product Liability Claimsarising from Manufacturing Defects arise from the fact that there was an error during the manufacturing process thus making the product unsafe. Manufacturing Defects usually take place in a batch of products.
  2. Design Defects: Product Liability Insurance Claimsalleging Design Defects have to prove that the Product’s Design is inherently dangerous or defective. Design Defect Claims do not occur from some error in the manufacturing process.
  3. Warning or Labeling Defects: Another form of Product Liability Claimis the one arising out of warning or labeling defect. Here, the manufacturer of the product has a duty to warn the consumer about the inherent danger of consuming the product, but the manufacturer failed to do so. Such claims typically involve cases where the Product is dangerous to use in some way which is not apparent and thus requires the user to exercise the special precautions while using the product.


How does a Product Liability Insurance Policy help in case of such claims?

A Product Liability Insurance Policy can help deal with the above-mentioned type of claims by providing cover for bodily injury or property damage caused by a flaw in the product or malfunction. The Product Liability Insurance Policy pays for Legal expenses and Compensatory damages arising from such claims.


Does a Commercial General Liability Insurance Policy cover Product Liability Claims?

A Commercial General Liability Insurance Policy covers premises liability as well as product liability. So, many businesses purchase a Commercial General Liability Insurance Policy instead of a Product Liability Insurance Policy. The cost of a Commercial General Liability Insurance Policy is also reasonable.


What are the Exclusions in a Product Liability Insurance Policy?

A Product Liability Insurance Policy excludes the following:

  • Fines and Penalties
  • War and Nuclear Risks
  • Fines and Penalties
  • Contractual Liability
  • Liability arising out of Product Guarantee
  • Liability arising out of failure of products to fulfill the purpose for which they were intended.

Final Take

Thus, a Product Liability Insurance Policy Is an absolute must to protect the business from claims of bodily injury and property damage as a result of using the company’s products. The Product Liability Insurance Cost is very reasonable which makes the decision to purchase a Product Liability Insurance Policy a no-brainer.

It is advisable to take the advice of an experienced Product liability insurance agents in India before you purchase a Product Liability Insurance Policy so that you get comprehensive coverage and reasonable Product Liability Insurance Quotes.


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