Product Liability Insurance

Product liability insurance generally isn’t required by law, but wholesalers, commercial landlords or some business partners may require you to show proof of your business insurance coverage before doing business with you. Even if it’s not required, product liability coverage could help protect your business from potentially expensive claims if a product you make, sell or distribute causes injury or property damage to your buyer.

Yes, product sellers — as well as product makers — are responsible for the products that they sell. This is often strict liability, meaning you can be legally liable for the damages and injuries your products cause, even if you weren’t negligent in making or selling them.

Manufacturers aren’t the only businesses that can face product liability claims. Retailers, wholesalers and distributors may also be held responsible if a product they sell or distribute causes injury or property damage.

For example, if your online store sells a defective appliance that starts a fire in a customer’s home, your business could potentially be named in a lawsuit even though you didn’t manufacture the appliance. And even if you’re not found to be at fault, your business will still have to cover the cost of a legal defense.

Product liability claims can arise from a variety of issues, including:

• Design defects: A problem with the product’s original design that makes it unsafe.
• Manufacturing defects: Something goes wrong when the product is made or assembled.
• Inadequate instructions or warnings: A customer isn’t given sufficient information about how to safely use the product or potential risks.

Product liability insurance could help protect your small business if a customer claims they suffered bodily injury or property damage as a result of any of these types of defects.

Product liability insurance could help protect your online business if a product you sell on your website or a third-party seller’s site — such as Amazon or Etsy — causes injury or property damage. This can apply even if you didn’t manufacture the product yourself. For example, an online seller could face a claim if a defective toy injures a child or an electronic product causes a fire.

Product liability insurance could help provide protections against a wide variety of incidents and issues, but it doesn’t cover all types of damage or injuries. Some exclusions include:

• Employee injuries. While product liability insurance doesn’t provide coverage for employees, workers’ compensation insurance could help with protection for workers who suffer a work-related illness or injury — and it’s required in most states.
• Product recall costs. There’s a separate policy specifically designed to cover product recalls.

Product liability insurance is included with ERGO NEXT’s general liability insurance policy for retailers and online sellers. You cannot buy product liability on its own.

You can get general liability coverage 100% online in about 10 minutes. And get your certificate of insurance immediately after payment at no additional cost.

Start a free, no-obligation quote to see options and an exact price customized for your business. You can adjust the coverage limits to work with your budget. And your insurance will begin immediately after payment.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

At ERGO NEXT Insurance, product liability insurance is part of general liability insurance coverage. It cannot be bought on its own.

And retail business owners could benefit from all that general liability coverage can offer. In addition to coverage for design defects and defective products, general liability can also provide protections for other liabilities, including damage to other people’s property and medical costs for non-employees injured at your business. It can also help with some lawsuits around advertising injury, slander and libel.

It takes about 10 minutes to get a quote, buy coverage and get access to policy documents and your certificate of insurance (COI).

You can access your documents and COI 24/7 online or in the ERGO NEXT app for iPhone or Android.

You can file a product liability claim anytime online or in the ERGO NEXT app.

You’ll be asked to share the details of what happened and to provide relevant photos and documentation. We strive to make claims decisions as quickly as possible so you can get back to work.

Learn how to file a claim.