Product liability insurance

We often provide both of these covers together in the same policy, but public liability is usually connected to your services, work, and actions as a business, whereas product liability focuses on the products you’ve made, supplied, and/or sold.

Although product liability insurance isn’t a legal requirement, it could provide important cover for any business involved in the supply chain of a product.

You could face legal proceedings if a defective or faulty product causes injury, illness or property damage. Without appropriate cover, this could result in negative financial implications for your business.

Additionally, when you’re looking for suppliers, manufacturers or retailers to work with, you may find a product liability policy to be a contractual requirement.

Calculating how much product liability insurance your business may need involves working out the maximum cost of a potential claim. This will depend on the types of product you design, manufacture, repair or sell and the level of risk involved if something goes wrong.

Product liability insurance can cover the cost of defending and settling claims relating to illness, injury or damage to property caused by a faulty product.

We can add a product liability policy to your public liability insurance and tailor your cover with the level of protection your business may need – up to £10m if required.

Failing to meet regulations in this area can bring criminal claims too, so we can also cover legal defence costs up to £100,000.

It could be worth taking out a product liability policy when you start selling your products to the public. Product liability insurance is usually combined with a public liability policy to give you an extra layer of protection. 

So if you’re a manufacturer or retailer, a policy could provide some reassurance that you should be covered for any potential claims down the road. 

Exclusions – check to see what your policy doesn’t include or explicitly excludes to ensure that you have the right cover for your business.

Stipulations – the product liability policy might include stipulations with regards to quality control – you will need to adhere to these to ensure you’re covered.

Harm caused by a defective product – and liability for it – could potentially be attributed to any business within the supply chain.

Each case will have its nuances and this evidence will be used to identify which party is to blame. For instance, if a product is faulty, the blame may fall with the manufacturer, but if a faulty element in the product came from a supplier, the supplier or both parties may be liable. Meanwhile, a contaminated food product causing illness could mean both manufacturer and retailer are liable for failing to take necessary precautions.

This will depend on whether you have employers’ liability insurance in place. Public liability insurance is designed to protect your business against the consequences of legal action brought by members of the public for injuries or damage to their belongings. But when it comes to your employees causing injury or damage, this protection only activates if you also have employers’ liability insurance.

If you employ people, you’re required by law to have employers’ liability insurance.

There’s one exception here. Family businesses that aren’t incorporated as a limited company are not legally required to have employers’ liability insurance. The government defines a “family business” as one where all your employees are closely related to you (as a spouse, civil partner, sibling, child, parent, grandparent, grandchild, step-parent, stepchild, or half-sibling). So if you run an unincorporated family business and you choose not to get employers’ liability insurance, it’s important to know that your public liability insurance wouldn’t cover you against damage or injury caused by your team.

We provide a range of cover options for specific business types, including:

• Art dealer insurance
• Artist insurance
• Arts & crafts shop insurance
• Online retailer insurance
• Fashion insurance
• Craft insurance
• Market traders insurance
• Off licence insurance

Is your profession not listed? When you run a quote you can select your trade from over 1,000 options.