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Public and product liability insurance protects businesses from claims of any loss, injury, or illness caused by their products. Products liability coverage is a policy usually added as a part of general liability insurance, but can be bought separately as well.<br>The coverages available in this policy are:<br>1.tFaulty product<br>2.tUsage failure<br>3.tDesign defect<br>4.tFalse/misleading marketing<br>5.tFalse/misleading labels<br>6.tFailure to warn<br>7.tProduct information omissions<br><br>The policy also has some exclusions like any other insurance:<br>1.tEfficacy exclusions<br>2.tCost of product recalls<br>3.tLost inventory<br>4.tQuality control exclusion<br>5.tReporting exclusions<br>6.tMaterial exclusions<br>7.tEmployee injury exclusions<br>8.tVendoru2019s endorsement<br><br>The cost of product liability insurance depends on various factors like:<br>1.tBusiness/Product Type<br>2.tPosition in the supply chain<br>3.tSize of the company<br>4.tNumber of products<br>5.tQuality control procedures<br>6.tLoss control procedures<br>7.tClaim history<br><br>To learn more about product liability insurance, follow this link: https://quotezebra.com/product-liability-insurance/
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Product Liability Insurance Be safe from your own products!
What is product liability insurance? • Public and product liability insurance protects businesses from claims of any loss, injury, or illness caused by their products. • Products liability coverage is a policy usually added as a part of general liability insurance.
What does product liability insurance cover? • Faulty product Mass–produced products have high chances of defects due to manufacturing errors. • Example: According to LexisNexis’ case brief, MacPherson v. Buick Motor Co. was the first case against manufacturing negligence in which an injured consumer sued the automobile manufacturer for the use of wheels made of defective wood. The verdict was that the manufacturer is obligated to produce and inspect the product carefully.
2. Usage failure Consumers may suffer from injuries when they experience a malfunction from using the product. • Example: An NBCSports article stated that Francisco Garcia of the Sacramento Kings settled his lawsuit against the manufacturer of the exercise ball, Ledraplastic, that exploded while he was lifting weights on it in 2012. This incident caused him to break his forearm. Hence, he sued for the loss of income and injury and got the undisclosed settlement in his favor.
3. Design defect Production companies may have overlooked some design flaws of their product that could obstruct the product’s functionality and cause damage or loss to users. • Example: The Remington Rifle company has been running rounds of the court since its inception. With many gun owners accidentally shooting themselves and some accidental deaths, according to CNBC, the company engaged in a decades-long coverup of their defective guns that shoot without pulling the trigger.
4. False/misleading marketing False or misleading marketing done by companies to encourage customer to buy their products can cause harm to consumers who use products that don’t perform as expected. • Example: Dannon – a yogurt producer – proclaimed their products were “clinically” and “scientifically” proven to regulate digestion and boost immune systems. abcNEWS reported the company had to pay $45 million to consumers under charges of false health claims in 2010.
5. False/misleading labels Misinterpretation or incorrect information on product labels can lead to dire consequences for the consumers. • Example: In 2018, the food giant Heinz was fined for claiming a range of toddler snacks to be healthy. Known for its ketchup, the company had to pay a settlement of $2.25 million for misleading consumers since the snack products contained more than 60% sugar, according to ABC.
6. Failure to warn Consumers may suffer an injury or loss due to unclear or absence of product warnings. • Example: The famous 1992 McDonald’s coffee case exemplifies failure to warn. Stella Lieback suffered severe burns on her thighs, buttocks, groin, and genital area by spilling her McDonald’s coffee. An article in the HuffPost states that although the cup had a reminder that the coffee was hot, the court decided it didn’t serve as an actual warning.
7. Product information omissions Failure to include all or necessary information about a product may cause damage or harm to unsuspecting customers. • Example: Roundup is a common weed and grass killer product that claimed that it was safe for humans and animals. However, according to Bloomberg, 42,000 people have filed cases against the herbicide for being the root cause of cancer among the users.
Common exclusions and endorsements • Efficacy exclusions • Cost of product recalls • Lost inventory • Quality control exclusion • Reporting exclusions • Material exclusions • Employee injury exclusions • Vendor’s endorsement
Types of insurance that include product liability policy: • Nonprofit Insurance • Food Business Insurance • Restaurant Insurance • Construction Insurance • Beauty Insurance • Personal Trainer Insurance
Factors that determine product liability insurance cost Position in the supply chain Business/Product type Size of company
Quality control procedures Number of products Loss control procedures Claim history
If you want to learn more about product liability insurance, click on the button here or follow the link in the description below:
