Do I need product liability insurance?
A faulty product which causes injury or damage could open you up to massive claims, as a business owner it is always good practice to ensure you are protected should you be liable to pay any claims for compensation.
If you are planning on working with other companies they may request that you have the right products liability cover in place before they do business with you. However, product liability insurance is not compulsory.
What does product liability insurance cover?
Product liability insurance covers you for personal injuries and damage to property caused by your products. It also covers you if the products you have sold were sourced from outside the EU or if their manufacturer has gone out of business.
Product liability insurance shouldn’t be confused with product warranties or guarantees, which cover faults of the products themselves. Productliability insurance covers the damage resulting from that fault.
What are my responsibilities to ensure I’m covered?
Before paying out on any claim, your insurer will check whether you have complied with relevant quality control procedures, labelling requirements and other responsibilities set out by Trading Standards and gov.uk. So it is worth reading up on these on a regular basis.
The cost of products liability insurance is based on the products themselves and the business’s turnover. If you win new contracts or start supplying different products, you should inform your insurer to make sure you have the appropriate cover.