5 Liability Claims That Product Insurance Will Protect Against

Product liability insurance is essential for any firm producing consumer products. The laws on product liability make it clear that each manufacturer bears “strict liability” for the products they bring to market. As the owner of a manufacturing business, you are liable for all damages your products cause, even if you’re not responsible for what happened. Product insurance can effectively shield your company from this liability. It can protect you from the following types of claims you may encounter with your products.

Product Design Faults

Product insurance can protect you from problems with defects, even in the design stage. Even if your company does a thorough job developing new products and follows all the project management certification rules, design flaws may go unnoticed into production. Even a small fault, in the wrong place, can cause big trouble for your company. Product-wide recalls can cost a lot of money. Moreover, these faults can make your company look indifferent to your customer’s safety. Product insurance can help make sure these claims are kept smaller risks.

In-House Manufacturing Faults

Product insurance will protect your company in the case of manufacturing error. These faults can become costly, particularly if your company mis-manufactured an entire shipment. In the case of heavy machinery or food, these manufacturing faults might even lead to serious injury or death. Product insurance can protect you from lawsuit here. Any policy will insist on rigorous quality control standards. This will make these faults less likely. A product insurance policy protects you even before you make a mistake.

Upstream Manufacturing Errors

Product insurance can also protect you from mistakes made by other companies in the manufacturing chain. Under strict liability, if you receive faulty components from a third-party vendor, you can be sued for damage caused by those components. Surely, this can be very stressful. You have to make sure workers you don’t employ do their jobs perfectly. It also adds even more tension to already difficult fulfillment companies and vendor negotiations. Product insurance will make sure you don’t pay for others foolish mistakes.

Defective Instructions And Packaging

Product insurance also protects your business from bad instructions and packaging. Some products are dangerous even if used correctly. The difference between a successful product and one that does damage is often an instruction manual. Without that instruction manual, your product could be an accident waiting to happen. The same is the case if the packaging fails to inform the customer of potential dangers inside. Product insurance can make sure your company doesn’t suffer for a functional product made dangerous by a misplaced manual or a lack of warning language.

Customer Error Liability

Product insurance even protects your safe and functional products from the customers themselves. Strict liability means a customer doesn’t have to prove negligence on your part to sue for damages. If a customer ignores your warnings and does damage to his property, all they have to prove is that your product did the damage. Naturally, lawsuits like this can be long and costly, even if at the end your company wins. Product insurance and liability insurance protects you in such a situation to deal with customer in question.

With product insurance, your company will likely be protected when you take a product to market. It can protect against a wide variety of claims. Product liability insurance can protect you if your product has a design flaw. It can help if you discover some of your products have been mis-manufactured. On top of that, the policy can shield you from flaws caused by other companies in the manufacturing chain. It also covers you from customers who never received needed instructions. Moreover, it can insure you if the customer themselves are negligent in use of the product. With protection from these claims, you can market your product without an overwhelming fear of liability.

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