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Product Liability Insurance
Help protect your business when a product you make or sell injures someone or damages their property.
- In short
- Product liability responds to injury or damage a product causes; it does not pay to pull the product back.
- Who or what is protected
- Makers, distributors, and sellers against covered product claims.
- Where it stops
- Injury and damage claims, not recall, withdrawal or damage to your own product.
Responsibility for what you make or sell
This guide helps you trace product liability across the supply chain and separate it from recall costs.
Policy background and wording
Product liability insurance helps respond when a product is alleged to have caused harm because of a defect, a manufacturing flaw, or inadequate warnings or instructions. Liability can extend across the supply chain, from manufacturers to distributors and retailers.
For many businesses, product liability is included within the products-completed operations portion of a general liability policy, while higher-risk operations may carry dedicated or higher limits.
Injury claims are not recall costs
Products-completed operations may sit within general liability. Product withdrawal, replacement, and recall expenses commonly require separate consideration.
Who typically looks at it
- Manufacturers and fabricators
- Wholesalers and distributors
- Food and beverage producers
- Retailers selling physical goods
- Agricultural producers and processors
How it works
Liability can attach along the supply chain
Manufacturers, distributors, and retailers can each face product claims. Recall costs are a separate consideration.
Read the diagram as text
In order:
- Manufacturer
- Distributor or importer
- Retailer
- Injury or damage
- Product liability can attach at each stage
- Claim
- Recall and withdrawal: separate coverage
Terms on this page
- Design defect
- A flaw in how the product was designed.
- Failure to warn
- Inadequate warnings or instructions.
- Products-completed operations
- The part of general liability that commonly includes product claims.
Look deeper
I only resell. Am I exposed?
Liability can attach to sellers and distributors, not just manufacturers. Retailers and distribution partners frequently require suppliers to carry product liability and to be named on certificates.
What to check: Gather the certificate requirements your suppliers and retailers set.
Are warranty claims covered?
Breach of warranty beyond covered injury or damage is excluded.
What to check: Review your sales terms.
Product liability or product recall?
One responds to harm already caused. The other to removing a product.
| Product liability | Product recall | |
|---|---|---|
| Responds to | Bodily injury or property damage claims | Withdrawal, replacement, and recall expenses |
| Where it sits | Often within general liability | Commonly a separate coverage |
| Your own product | Damage to it is excluded | Ask what costs are included |
Scroll sideways to compare all columns.
What it may cover, and where it stops
Exact terms depend on the carrier, policy form, endorsements, and applicable law. Review the wording with your agent.
May cover
- Bodily injury caused by a covered product
- Property damage caused by a covered product
- Defects in design, manufacturing, or labeling
- Failure to provide adequate warnings or instructions
- Legal defense costs for covered product claims, subject to terms
Commonly excluded or limited
- Product recall and withdrawal costs, which often require separate coverage
- Damage to your own product
- Known defects or intentional misconduct
- Breach of warranty beyond covered injury or damage
- Liability above selected limits
Working through an example
Hypothetical and for illustration. Whether a real loss is covered depends on the facts and the policy.
- What happens
Contaminated food product
A food producer faces claims that a product made customers ill.
- Which part is relevant
Bodily injury caused by a product is the core product liability allegation.
- What could change the outcome
- Known defects or intentional misconduct are excluded.
- The cost of recalling remaining stock is separate.
- Limits apply.
Other situations
Faulty component damage
A component allegedly fails and damages a customer's property. Coverage may help with the third-party property-damage claim, subject to limits.
Before you talk to an agent
What underwriters usually weigh
- Type of products and their risk profile
- Annual sales and distribution footprint
- Quality-control and testing practices
- Claims and recall history
- Selected limits and deductibles
Other questions owners ask
Is product liability part of general liability?
For many businesses, product liability is included within the products-completed operations portion of a general liability policy. Higher-risk operations may carry dedicated or higher limits.
Do retailers need product liability if they only sell goods?
Yes. Liability can attach to sellers and distributors, not just manufacturers, so retailers commonly carry product liability protection.
Does it cover product recalls?
Recall and withdrawal costs are commonly excluded and often require separate product recall coverage. Product liability focuses on injury and damage claims.
Can suppliers require proof of product liability?
Yes. Retailers and distribution partners frequently require suppliers to carry product liability coverage and to be named on certificates of insurance.
Talk through product liability insurance with an agent
We compare carriers, explain the wording, and help you choose limits that fit how your business actually runs.
