Product Liability Insurance – Should You Purchase It?
In general, product liability claims arise from real or alleged defects linked to the design, manufacturing, labelling, warnings and warranties, packaging, storage, transportation and handling of your products and usually cite safety claims, manufacturing quality, spoilage and indemnity costs.
Damages awarded in such claims, depending on the jurisdiction where you are in, can include medical costs, compensatory damages, economic damages as well as attorneys’ fees, costs and punitive damages.
If you have a claim made against you or your business arising out of the product you have manufactured or sold, having product liability insurance can make the outcome less likely to be as damaging.
Here are some of the benefits of having adequate product liability insurance:
Assets
Product liability insurance can protect your business and its assets, which could be lost in the event that you’re not able to settle a compensation award.
Trading
Some retailers will not execute purchase orders unless the manufacturer or importer has secured a product liability policy.
If you’re an inventor, manufacturers may not be willing to roll out your product until the proper liability insurance has been secured.
Compensation
Product liability insurance ensures that a client who has suffered damages will be adequately compensated within the limits of the policy and you won’t have to pay out of your own pocket.
Expert Dealing In Claim
Most established insurers that provide product insurance liability have expertise in handling claims and in some cases they are able to settle claims out of court without the need of a lengthy trial.
Legal Costs
Product liability insurance will, in almost all cases, cover all legal costs associated with defending any claims against your business in a court of law.
Recall Costs
Coverage will normally include the costs of recalling a defective product.
Other Costs
Spoilage and medical costs are just some of the expenses you would have to foot out of your own pocket if you didn’t have product liability insurance.
Advice
Insurance agents will also advise you on pattern problems with your products as well as allocating product liability risk among suppliers and customers.
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