Product Liability Insurance Benefits Small Business Owners

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team walking through a warehouse
four people walking together in a warehouse Are you a small business owner working within the supply chain of a product? Whether you work with a product that is being designed, manufactured, distributed, or sold, you could be at risk of a lawsuit that could put you out of business and you need to have a barrier against any such claim. Lawsuits are no fun and according to Jury Verdict Reserach data, the average award in personal injury cases that resulted from product liability claims was $1,847,438. Can you imagine being on the hook for a payout that large? And that’s not to mention all the other associated costs and how much you’ve paid your lawyer up to that point. What you need to help mitigate such a situation is product liability insurance. Today, Insurance Canopy is here to walk you through some of the most frequently asked questions about product liability insurance and let you know what you should look for in a provider. Let’s dive in.


Product liability insurance is a liability policy designed to protect you against third-party liability claims that something you designed, manufactured, distributed or sold, caused them bodily injury. Bodily injury as a result of using a product can be anything from eating something that hurt you or using a product that was designed poorly. And, did you know that you could be named on the suit no matter what stage of the supply chain you’re at? You could be sued if you designed an item but didn’t distribute it. You could be sued if you did sell the item but didn’t produce it. With lawsuits, everyone on the supply chain is on the hook for this claim.


Product liability insurance is your safety net and your helper, acting how most insurance would, protecting your assets from financially harmful lawsuits but also aiding you in being able to safely sell your products and get said products into other retailers. To give you an idea of how or where it would come into play take the following as examples.
  • You manufacture ladders. The next set of ladders has a different design that you’ve approved. Upon distributing the ladders and selling them, customers begin to fall off after prolonging weight on one of the rungs which then causes them to fall and get injured. The customers begin to sue you for creating a bad product and you’re now looking at recall and liability exposures.You’d need product liability insurance
  • You sell bath products you’ve formulated in your own kitchen. You find a distributor but they mislabel your product. Customers who are allergic to certain ingredients in your products begin seeing side effects and decide to sue you for selling mislabeled products. You’d need product liability insurance here.
  • You’re expanding and looking to get into the cannabis industry by creating CBD products. You decide to go the ingestibles route but are having trouble getting the oil into dispensaries or other retailers. You need product liability insurance to protect your product if you want to sell it.


Anyone working within the supply chain of any product needs product liability insurance. It doesn’t matter if you’re a manufacturer, distributor, or retailer or if you’re importing products to sell from another country. Once your name is on a product you can be held liable for what that product does or fails to do. To get an idea for what kinds of products a product liability insurance provider could insure can insure check out this list:
  • Beauty and Cosmetic
  • Vape and E-Cigarette
  • Cannabis
  • CBD Topical
  • CBD Ingestibles
  • itamin and Dietary Supplements
  • Cleaning Products
  • Grocery & Food
  • Health & Household
  • Home Office
  • Medical Devices
  • Pet Supplies
  • Sporting Equipment Mfg.
If you don’t see your product, don’t panic. The carrier you choose to provide your insurance will be a good one if they can write for hard-to-place coverages such as the endeavor you’re looking to insure.


Now that you know what product liability is and how it can benefit you, we want you to know a little bit about what your chosen insurance provider should have to offer. It’s hard to unscramble yourself when there seem to be so many options out there. You need an insurance provider who offers you:
  • A+ rated insurance
  • Licensed customer support teams
  • Experienced agents within your industry
  • Affordable premiums
  • The ability to help you with online sales
This, along with offering the coverages you need, will ensure you have the best coverage for your business endeavors.


When you know what your insurance does and why it’s needed, you gain an advantage against your competitors. You’re much more aware and knowledgeable about what you need to be protected against, which can help you be a more thoughtful businessperson. And with the proper product liability insurance coverage, you’ll have the peace of mind you require to continue expanding your business. Looking to sell online? Expand your business with Jane! -Get started today. Insurance canopy plus Jane.

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