Product Liability Insurance Claims
Product Liability Insurance Claims can at minimum, financially damage your company and at worst bankrupt it. A Product liability insurance policy is a type of insurance that protects businesses from claims related to the products they sell. It covers damages or injuries that may be caused by the use of a company’s product. If a customer is injured by a product, they may file a product liability claim against the company. These can be costly and time-consuming to defend. Having product liability insurance in place can help cover the costs of defending against these claims. It can also pick up the costs of settlements or judgments that may result.
Product liability insurance claims that a business may face can come in many forms, including:
- Manufacturing defects: These occur when a product is not made correctly, resulting in an injury or damage. Like, if a car’s brakes fail because they were not manufactured properly. The manufacturer could be liable for any injuries or damages that result.
- Design defects: These occur when a product’s design is inherently dangerous, even if it was made correctly. For example, if a ladder is designed in such a way that it is prone to tipping over, the manufacturer could be liable for any injuries or damages that result from its use.
- Warning defects: These occur when a product does not have adequate warning labels or instructions for use. They can lead to injury or damage. For example, if a medication does not have proper warning labels and a person takes an overdose as a result. The manufacturer could be liable for any injuries or damages that result.
- It is important for businesses to have product liability insurance in place to protect themselves against these types of claims. Without insurance, a business could be at risk of financial ruin if it is found liable for damages or injuries caused by its products.
There are several types of product liability claims that can be particularly costly or damaging for businesses, including:
- Claims for products involving fatalities: Claims involving the death of a person can be particularly devastating. For a business these can result in significant damages or settlements.
- Product Liability Claims involving widespread injuries: Claims involving a large number of injuries can be costly for businesses to defend against, especially if the injuries are severe.
- Insurance Claims involving defective products with a high potential for harm: Products that have a high potential for causing harm, such as medications or automotive parts, can be particularly risky for businesses if they are found to be defective.
- Those claims involving products with a long shelf life: Products with a long shelf life, such as medical devices or construction materials, may continue to be used for many years after they are sold. This can increase the potential for claims to be filed, as the product may still be in use when a defect is discovered.
- Claims involving products with a large user base: Products with a large user base, such as consumer electronics or children’s toys, may be at risk of more claims being filed if a defect is discovered.
The Importance of Product Liability Insurance
It is important for businesses to carefully consider the risks associated with the products they sell and to have appropriate product liability insurance in place to protect against potential claims.
There are several factors that can impact the cost of product liability insurance. Including the type of products being sold, the industry the business operates in, and the company’s history of product liability claims. It is important for businesses to shop around and compare quotes from multiple insurance providers to find the right coverage at the best price.
It is estimated that over 40 million lawsuits are filed every year in the United States, and in 2018, the total number of registered lawyers easily exceeds one million. Two thousand eighteen data from the American Bar Association on the general population of lawyers indicate a total of 1,338,678 licensed, active attorneys in the United States, so it isn’t challenging to find one1.
If a business is facing product liability insurance claims, it is important to take the following steps:
- Document the incident: It is important to gather as much information as possible about the incident, including the date, time, and location of the incident, as well as any witness statements.
- Notify the insurance company: It is important to notify the insurance company as soon as possible after the incident occurs. The insurance company will handle the claim and provide guidance on how to proceed.
- Cooperate with the investigation: It is important to cooperate with the insurance company’s investigation and provide any information or documents that may be requested.
- Consider seeking legal counsel: If the product liability claim is complex or if the business is facing significant damages or liabilities, it may be advisable to seek legal counsel to help navigate the process.
- Product liability insurance is an important tool for businesses to protect themselves against the risks associated with selling products. By having the right coverage in place and taking appropriate steps in the event of a claim, businesses can minimize the financial impact of product liability claims and focus on running their operations.
Every company’s offerings and operations are different
Underwriting a products liability insurance policy for your product is complicated. If you need to protect yourself against product liability insurance claims, please complete a product liability quote request . Castle Rock Insurance Agency currently offers Product Liability Insurance Policy Coverage nationwide. Including but not limited to New York, NY. New Jersey, NJ. California, CA. Massachusetts, MA. Illinois, IL. Florida, FL. Connecticut, CT. Texas, TX. South Carolina, SC. Vermont, VT. Georgia, GA. Colorado, CO. New Mexico, NM. Oregon, OR. Washington, WA. Arizona, AZ. North Carolina, NC. Virginia, Nevada, NV. Colorado, CO. Oklahoma, OK, and Pennsylvania, PA in addition to all other states.
