Product Liability Insurance Vs General Liability Insurance
Businesses large and small, start-ups and established, all have one thing in common: they need insurance to protect their investment from claims they become legally liable for.
Understanding how each type protects your business is imperative to select the best insurance for your business.
What Is The Difference Between Product Liability Insurance Vs General Liability Insurance?
Two key types are product liability insurance and general liability insurance. While these can be purchased in a combined policy or as a stand-alone policy, it is important to explore the distinction between product liability insurance vs general liability insurance.
Product Liability Insurance
Product liability insurance is specific coverage for the products your business manufactures, private labels, or imports. This will respond to claims by third parties of injury, property damage, or illness made against your company because of your product. The benefits include payments of medical expenses, defense costs, and other damages that your company becomes legally liable for paying.
Some common product liability insurance claims are:
Tampering or adulteration
It is an unfortunate fact that people with mal intent may tamper with your product after it is out of your control, such as during shipment or even when it is on a retailer’s shelf.
Even the best products can fail regardless of the amount of testing and design put into making it. Lithium-ion batteries which are in nearly all our favorite tech devices have been known to overheat and cause fires or explosions. The property damage can be expensive and potentially include multiple claimants, costing businesses thousands of dollars to remedy the incurred losses.
General Liability Insurance
As a business owner, you have likely been asked by a distributor or retailer who is selling your product to provide proof that your business is covered by general liability insurance. However, you may not entirely know what general liability vs product liability insurance covers or how it protects your company.
General liability insurance is made up of multiple coverage sections. These are:
Coverage A: Bodily Injury and Property Damage Liability
Coverage B: Personal and Advertising Injury Liability
Coverage C: Medical Payments Liability
Damage to Rented Premises
Do You Need Product Liability If You Already Have General Liability?
You may wonder if your company needs product liability insurance if you have general liability insurance. Many general liability policies have exclusions or restrictions on the products that are covered. This is why it is imperative to read and understand your policy.
When reviewing your general liability policy, pay close attention to any added forms with exclusions. An insurance company can limit coverage to specific products or exclude product coverage entirely if they are not comfortable with the products you manufacture, distribute, import, or sell.
Purchasing general liability insurance vs product liability insurance from a company that specializes in the coverage you need and can also offer some additional coverage that may not be available from a company offering a combined policy.
Additional coverage to consider with product liability insurance:
How Much Product Liability Insurance Do You Need?
There are some important factors to consider in determining the amount of product liability insurance to purchase.
There are a number of complexities to determining the correct insurance for your business. At Insurance Canopy, we have over a decade of experience in product liability insurance. Find out more here or contact one of our licensed agents to purchase your product liability insurance.