What is Product Liability Insurance?

As part of our liability insurance video series this video looks at product liability insurance. Watch to learn how a business can be vulnerable through the products they make and how this insurance protects them and their customers.


Video transcript

Hi, my name is Ben Leech, and I'm an adviser for Towergate.

In this video I’m going to talk about product liability insurance.

If a product were faulty through a mistake of you, the manufacturer then you could be liable if that product causes harm to its intended user. Product liability insurance can then cover the compensation costs on your behalf. It’s generally not sold as a standalone policy because it is only one part of the liability insurance a business might require.

It’s not just manufacturers either.  Let’s look at some of the businesses that might require product liability insurance.

  • If you manufacture, service, repair or repurpose a product.

  • If you commission the manufacture of a product or your business name appears on the product.

  • If you use material or components from a supplier/producer who is no longer in business or is un-identified.

  • If you use materials/components or imported goods from outside the European Union.

A compensation claim for a faulty product can be brought against a manufacturer any time within 3 years of using the product, and in some certain cases even longer. This means you should keep your cover going in gaps of manufacturing and even if you stop trading altogether.

Each claim is treated on a case by case basis and has no legal limit for how much it can be.  They are calculated based on the severity of the individual case and scale of loss.  This means it’s very important you carefully consider the amount you will need so as not to be underinsured.

Your industry and governing bodies may be able to offer you advice on the levels of cover you could need or give us a call today to set up your product liability insurance as part of your business insurance.

Want to find out more about our Product Liability Insurance?

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Interested in learning more about different liability insurance products?

Here are more articles and guides about liability insurance that you may need for your business:

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