Product Liability Insurance Isn’t Just for Manufacturers

There are many risks involved in manufacturing and selling products. Whether you’re a small operation selling handmade soaps or candles, or a large company manufacturing auto parts, your business needs product liability insurance.

If you make, sell, or distribute a product, you are responsible for the safety of that product. If it ultimately is unsafe and someone is hurt, you could be held financially responsible, and even your personal assets could be at stake. Business size isn’t always the bottom line – even a small business growing, harvesting, and selling a crop at farmers’ markets could be liable for consumers’ injuries or illness resulting from its crop.

However, some businesses may not need as much coverage as others; it depends on the level of risk, and this usually is a function of the type of business or industry. Companies, such as those manufacturing medicine, medical equipment, toys, and sports equipment, for example, have a higher level of risk than jewelry manufacturers or tool suppliers.

It’s not just the manufacturer that is liable: Every business in a product’s supply chain can find itself liable for a defective or dangerous product. Many cases of liability have been attributed to a retailer, wholesaler, or middleman, providing they were proven negligent.

All these companies should consider product liability insurance, even if they don’t actually manufacture items directly. It just takes one recall or one lawsuit to close a company. Discuss the coverage you should have with my office. You may be glad you did!