What is Product Liability Insurance?
Product Liability insurance provides protection against financial loss from the legal liability incurred by an insured. This liability can occur because of injury or damage resulting from the use of a covered product or out of the liability incurred by a contractor after a job is completed. This type of coverage is usually included and forms a part of a Commercial General Liability insurance policy. However, certain classes of business are considered to be higher hazards for product liability. The exposures associated with these types of risks may require specialized insurance underwriting, so a stand-alone products/completed operations policy may be required. Examples of classes of businesses that may require a stand-alone products/completed operations policy are:
- Medical Technology Companies
- Medical Device Manufacturers
- Life Sciences Companies
- Process/Control Design Manufacturers
What is Product Liability?
Product Liability or PL is the liability for damage, injury, or illness that is caused to a 3rd party by a product that is sold or manufactured. However, this definition has been stretched to include intangibles, real estate, or even marketing media. Claims can also be based on negligence, strict liability, or breach of warranty of fitness depending on where a claim is based.
What kind of events can trigger a Claim?
In order for there to be a legitimate claim, it must be proved that the product in question is defective by either design defects, manufacturing defects or defects in marketing. Product Liability is generally regulated by each state and is based on strict liability, there is no federal law regulating PL.
Do you really need Product Liability Insurance?
“I’m just a distributor. I shouldn’t have to pay much for my insurance.” Not so fast! You’re probably much more than a distributor. To find out, take this quiz:
- Do you import your product?
- Do you have your product made to your specifications?
- Is the product your name brand product?
- Did you create the instructions or warnings for your products?
If you answered “yes” to any of these questions, you are more than a distributor in the eyes of the law and your insurance carrier.
If you are an importer, you are seen as the manufacturer in the U.S. because it is deemed too expensive and complicated to pursue claims against foreign manufacturers. Bringing foreign products into the U.S. market means the burden of safety belong to you.Having a product built to your specifications, translates to the design defect claims belonging to you.If you designed the product, you might be responsible for the content of the instructions and warnings. Any instruction/warning claims belong to you.If the product is your name brand product, many state laws require that you have the name of the manufacturer clearly printed on the product label.If it is unclear, then you will be treated as a manufacturer. Previous Next
Specialty insurance carriers design coverage forms specifically tailored to these industries. Some of the additional coverages that are included in a stand-alone products/completed operation policy are:
- Worldwide Coverage
- Vendors Additional Insured Coverage
- Scientific Advisory Boards
- Sales Representatives
- Clinical Trails
- Clinical Research Organizations
- Clinical Research Coordinators, Monitors or Investigators
- Investigational Review Boards or Medical Ethics Committees
- Independent Engineers or Consultants
- Medical Staff Members
- Professional Services
- Known or Foreseeable Side Effects.
The average Product Liability Claim costs over $30,000
SciTech Insurance Pros
SciTech Insurance Pros is a specialized Product Liability Insurance Agency. We provide tailored insurance solutions to each and every one of our clients since we are an independent agency.
We serve Texas, California, Washington, Colorado, and many other states nationwide.
We provide specialized coverages such as Professional Liability Insurance, PCI Compliance Insurance, Product Liability Insurance, Technology Insurance, Clinical Trials Insurance, Cyber Insurance, Patent Insurance, and many more.
SciTech Insurance Pros is more than an insurance policy, we are your gateway for securing and protecting your Business. Call us at 855-845-5100
A proud member of Trusted Choice
A company who distributes nutraceuticals in the U.S. by way of importation has one of its products cause consumers to contract life threatening illnesses.