Is Product Liability insurance different for online retailers and brick-and-mortar stores?

Find out if product liability insurance differs for online retailers and brick-and-mortar stores. Understand how coverage can help.

Aditya Raghunath - Writer for NEXT Insurance
By Aditya Raghunath
Kelly Hendrickse - editor for NEXT Insurance
Reviewed by Kelly Hendrickse
Matt Crawford for NEXT Insurance
Fact-check by Matt Crawford

Updated May 30, 2023.

Product liability insurance generally protects both brick-and-mortar stores and e-commerce businesses in the same way.

The U.S. Consumer Product Safety Commission reports that 29.4 million injuries occur each year due to unsafe or defective products.

While online retailers may have distinct prerequisites or terms, such as Amazon mandating sellers to possess general liability insurance, product liability insurance can mitigate financial losses for both online and offline stores.

» Do you have an online store? Check out this guide to internet business insurance

What can Product Liability insurance help cover?

Some situations and claims where product liability can help offer protection are:

  • Harm caused by your products: For example, a jewelry store may face legal action if one of their sold items pierced a customer's skin, causing injury.
  • Product defects: For instance, an electronics seller shipping out a batch of smartphones with faulty batteries that cause them to overheat and catch fire.
  • Lack of warning labels: Take a dietary supplements retailer. If a customer experiences adverse health effects because the packaging had no allergy or side effect warnings, the retailer could be held liable.
  • Customers' property damage: If items aren't packaged correctly, for example, and dislodged and damaged a customer's car or home, the store or distributor may face legal claims.

Although product liability insurance can be helpful, it may not cover all types of damage or injury.

For instance, employee injuries can be covered with workers' compensation insurance, while customer injury not caused by a product in a physical store would require general liability insurance.

How NEXT can help retail businesses with Product Liability insurance

Whether you have an online or a brick-and-mortar store, product liability insurance can give you peace of mind by helping with legal fees and liability claims resulting from product issues or defects.

With NEXT, you'll get affordable and tailored insurance coverage that suits your business needs. To view your options, simply apply online for an instant quote in less than 10 minutes. Once you purchase the coverage you need, you immediately get access to your certificate of insurance to share it 24/7 with the NEXT app.

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