Product Liability

Product liability insurance is a critical safeguard for manufacturers and sellers, providing protection against lawsuits stemming from the manufacturing or sale of a company’s products. This coverage encompasses liability for bodily injury or property damage incurred by a third party due to a product defect or malfunction.

Understanding Product Liability Claims:

Various entities, including retailers, wholesalers, distributors, resellers, and manufacturers, face exposure to product liability lawsuits. These claims are typically founded on alleged:

Manufacturing Defects: Claims that the product deviated from its intended design during the manufacturing process, making it unsafe for use.

Design Defects: Allegations that the product’s design is inherently flawed or dangerous.

Inadequate Warnings and Instructions: Claims that the product lacked sufficient warnings or instructions for safe use, resulting in harm to the user.

Damages awarded in a product liability lawsuit can encompass medical expenses, lost wages, pain and suffering, and in some cases, punitive damages aimed at penalizing the defendant for misconduct. Attorney fees may also be awarded.

Strict liability often applies in product liability cases, meaning liability exists even in the absence of negligence and is not contingent on proving fault. In cases where multiple product liability claims are consolidated into a class-action lawsuit, it’s not uncommon for companies to face significant financial repercussions, potentially leading to business closure.

The Importance of Adequate Product Liability Insurance:

For manufacturers and sellers, having sufficient product liability insurance is paramount. Our agent at Klinger Insurance Group in Germantown, Maryland, can assist in ensuring that your company maintains comprehensive coverage.

Determining the Cost of Product Liability Insurance:

The type of product your company manufactures or sells influences the rate for product liability insurance. Insurers assign a class code to categorize your business, with coverage for hazardous products typically carrying a higher cost.

Premiums are often based on estimated sales at the start of the policy period and adjusted by the insurer following an annual audit. Our agent at Klinger Insurance Group will collaborate with you to secure the necessary coverage for your company at the most competitive rate available.