Each year in the United States, thousands of injuries are reportedly caused by defective products. In the unfortunate event that one of your products causes another person harm and they file a claim against your business, the courts may hold you responsible for the incurred costs of the injury.

Product liability claims can be in regard to a product causing property damage, causing someone illness, causing someone to be injured, or even death.

You can be exposed to a product liability claim if your business operations include:

• Manufacturing component parts
• Manufacturing, importing, or distributing products
• Retailing products to consumers
• Wholesaling products to retailers

Under the definition of “Strict Liability,” a person who is injured by a product may be entitled to compensation for their injuries without showing that the manufacturer or seller of the product was actually negligent.

This is where Insurance Canopy comes in.

You can be confident that your company will have the coverage it needs with a policy tailored specifically to your business operations.

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Our policy provides coverage for goods or products manufactured, sold, handled, distributed, or disposed of by you and/or your company. Your policy will also offer protection from providing, or failure to provide, warnings or instructions on your products.

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Yes. If you are manufacturing, selling, handling, distributing, or disposing of a product, you need insurance. This type of coverage is designed to respond to lawsuits or claims made against manufacturing defects, design defects, defective warnings, and instructions. No matter how careful you are or how involved you are with your business, there’s always a chance of mistakes happening.

Product liability insurance is designed to protect your business from two kinds of claims:

• Lawsuits, accidents, or negative reactions arising from products sold, distributed, or manufactured
• Third-party claims such as bodily injury and property damage losses arising out of a defect in the product your business sold, manufactured, or distributed

Insurance Canopy helps small business owners assess the specific risks associated with their industries and then customizes liability coverage to meet their needs.

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The amount of coverage you need may vary based on the niche your product is in. The industry standard is a $1 million dollar per occurrence limit with a $2 million dollar general aggregate limit. Depending on your sales, assets, or contractual insurance requirements our licensed agents can include excess and umbrella policies as well.

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We live in a litigious society, and the need to protect your business and assets from potential claims and lawsuits is of growing importance. Such claims could potentially lead to financial losses and business disruption.

Average Cost for Insurance Canopy Customers

On average, our customers pay between $800-$1400 for their annual premiums. This is highly dependent on the size of your business, your annual revenue, and the type of product you are designing, manufacturing, or distributing.

Factors that could affect the cost of a policy

Business Size:
How many employees do you have? Is it just you and a partner running a home warehouse? Or do you own a store with multiple employees? The size of your business will affect how much you pay for product liability insurance.

Revenue:
Our application will ask you about previous annual revenue and you may be asked about projected revenue. Your past sales will impact your liability insurance quote.

Limits Needed:
The limit on your policy is the maximum that your insurance will pay out during any given policy period. Are you looking to meet contract requirements for a retailer? Or are you trying to increase your current insurance limits? Our agents can help you determine the policy limits that meet the needs for retailers or discuss what limits meet your personal/business needs.

Claims History:
Insurance is there for when you need to file a claim. You’re paying for the convenience of not having to deal with the issue on your own. However, if an insurance company sees you have a long history of filing claims, your insurance may increase in cost. This is because the insurance company may see insuring you as taking on more risk. The good thing is if your business does not have a history of filing claims then you’ll likely have a lower cost.

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Insurance Canopy is proud to offer our insureds the option to add a product recall insurance endorsement to their policies.

Product recall insurance protects your business against the costs associated with a product recall. A product recall typically occurs when a product is found to be unsafe or harmful to consumers. This could be a beauty product found to have toxic ingredients or food found to have bacterial contamination. When a product is found unsafe to the public it must be pulled from shelves and recalled from those who have already purchased it.

The costs associated with this process can be extremely high and you’ll want to be sure you’re properly insured against this possible risk.

Our product recall endorsement can be added to a product liability insurance policy for as low as $250 a year. Be sure to direct any questions to your agent.

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When doing business with a product at any stage of the supply chain of that product, you could be held liable for any claims that the product caused bodily harm or damage.

If you’re a supplier, manufacturer, distributor, or retailer of a product, you face the same risks as everyone else in the supply chain. We’ll describe some examples below to explain more.

Suppliers
As a supplier, you’re in charge of providing the necessary materials to a manufacturer so they can begin producing a product. Let’s say the materials you supply are found to be substandard and unsuitable for the job at hand. The materials could cause a ripple effect resulting in the consumer buying a faulty product that might break or cause injury upon use. You could be named in the lawsuit filed by the customer who injures themselves using the product.

Manufacturers
Say you create a product that isn’t properly assembled before being sold. When that product reaches your customers and they begin to get injured from using the item, they’ll not only name the store who sold it in the lawsuit they file but you’ll be named as well since you are the manufacturer. Product liability insurance could help protect you.

Distributors
As a distributor, you’re responsible for circulating the product to everyone who can sell it. This means that—in a lawsuit concerning product liability—you could be named and held liable for injuries that occur to the end user of the product who was harmed.

Retailers
When you sell something directly to a consumer and it ends up causing them harm or injury, you can be held liable for selling an item that causes an individual harm. This means that in a liability lawsuit you’d be sued and likely have to pay for associated costs.

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Insurance Canopy is dedicated to providing manufacturers, importers, and distributors with customizable policies for consumer, commercial, and industrial goods. We’re here to help you assess the specific risks associated with your industry and customize the product liability coverage your business needs.

We have the ability to provide insurance solutions for small businesses in the most niche industries carrying a wide range of products. Our covered industries range from vitamins and dietary supplements, beauty products, and vape and e-cig equipment, to emerging CBD topical and ingestible products and cannabis goods.

With our product knowledge and expertise, you can rest easy knowing that someone is taking care of your insurance needs.

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When a customer makes a purchase from you, they are expecting to receive a reliable product in return. Failing to provide a safe product may end up in a huge financial loss for you. Even if you are found to be not at fault, the cost of legal fees alone can be detrimental to your business.

According to a litigation report by Lex Machina, product liability lawsuits in the U.S. federal court system have been steadily increasing since 2015. With the number of claims on the rise, being equipped with the right coverage is essential.

An individual may file a product liability claim for bodily injury or property damage caused by the use of your product(s). This can include, but is not limited to, the following:

• Bodily injury such as a burn, cut, or broken bone caused by the materials or design of your product
• Choking hazard caused by your product
• Death from an injury or illness sustained by use of your product
• Fire damage caused by electrical elements in your product
• Warning or labeling defect in which a manufacturer fails to provide the appropriate warnings on your product

Even if you have strict product testing and carefully monitor product safety, accidents can still occur. Having product liability insurance offers you

Example #1 - $161,000,000 Claim

After attempting to start a controlled fire, a Blitz gas can exploded in the hands of one Orgeon man. He suffered burns across 45% of his body, and is just one of over 50 people who filed lawsuits against the company. Walmart was named as a co-defendant on several of the cases as they were the biggest retailer of the cans. Had Blitz installed a 5 cent safety device, many of the injuries and deaths may have been avoided. The company ultimately had to pay an estimated $161 million in settlements, with Walmart contributing around $25 million of the amount. Blitz ended up filing for bankruptcy and closing manufacturing plants.

Example #2 - $850,000 Claim

For one young woman, a hair dryer purchased from Amazon almost cost her her home. An electrical failure in the product started a fire in her bedroom that quickly spread to the rest of the house. After suffering from smoke inhalation, property damage, and emotional damage, both Amazon and the manufacturer paid over $850,000 in reimbursements.

Whether you are a supplier or a retailer, you sell online or in-stores, product liability lawsuits can impact any part of the product chain. Are you prepared to spend the money, time, and resources to handle a claim on your own?

Insurance Canopy has helped hundreds of business owners like you navigate through product liability lawsuits and create a plan suited to individual needs. Talk with a qualified agent today to see how product liability insurance can fit into your risk management plan.

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