Even if you manage to create the perfect product, there are always risks associated with them at every stage, starting with the development to the manufacturing, and then on to the shipping and distribution, and so forth. For small stores who simply sell the products and don’t actually make them, there are still risks involved. Thankfully, there is product liability insurance for small business.
This kind of insurance covers any claim that is related to product defects. It is usually available to businesses that manufacturer and sell products. Regardless of your involvement in the actual products, you still have a responsibility to ensure their safety. There could always be a potential risk involved, as absolutely safety cannot be managed 100% of the time for whatever reason.
It can be any kind of product across any industry. Some obviously carry more risks than others, whether you sell to consumers or other businesses. The injured third party doesn’t just have to be somebody who purchased the product – it could literally be anybody who comes in contact with it after it is sold.
However, there are restrictions. Product liability insurance for small business might not cover any injury to an employee that may have occurred during the manufacturing of the product. There is a chance that it might not cover the cost of product recalls. For something such as this, you would need product recall insurance.
Variations in Product Liability Insurance for Small Business
Product lawsuit claims tend to come in three primary variations: manufacturing, design, and improper or insufficient instructions and warnings. The product design claim is the most self-explanatory. Due to a piece of furniture having a top-heavy design, it could topple over on top of somebody. For manufacturing issues, the incorrect components could be used in the construction of the product, causing it to either fail to perform as promised or even cause harm to somebody.
The improper instructions claim is also pretty self-explanatory. There should always be warnings, even if they seem silly, and the instructions on how to assemble or use something should always be clear and concise.
Keep in mind that claims regarding products typically are not included in general liability insurance. It might be something you need to add on specifically. Once again, you might want to take it a step further to make sure that there is coverage to protect claims from employees who might be injured by a product.
Where can you find product liability insurance for small business? You can start with Hiscox Business Insurance Inc. It’s a great place to get a free quote and to look for tailored solutions specifically geared towards your industry and size of business.