How Distributors Insurance Protects Against Product Liability Claims

Distributors and wholesalers insurance may describe various tailored coverages designed to meet the needs of businesses involved in distributing and wholesaling goods. Whether you’re a distributor, wholesaler or part of the supply chain, having the proper insurance can help protect your business from the financial burden that can arise due to accidents or mishaps on the job. 

What Is Product Liability Insurance?

Product liability coverage is an essential part of a distributors insurance policy. Product liability insurance can help financially shield businesses when there’s a claim that a product they made or sold caused harm. These claims can arise from physical injury or property damage and may be brought by the buyer, a user, or a bystander. The harm or damage could result from design flaws, product defects, manufacturing defects or flaws, and inadequate instructions, labels and warnings. Virtually any product has the potential to cause harm or property damage, making product liability insurance an essential consideration.

What Does Product Liability Insurance Cover?

Product liability insurance may provide coverage for businesses when facing claims that a product they manufactured or sold caused harm. Product liability insurance can typically cover the following:

• Legal costs—If your business faces a lawsuit due to a defective product, this insurance may help cover legal expenses, including attorney fees, court costs and settlements.
• Medical expenses—If someone is injured by a faulty product, the insurance may help cover their medical bills.

Keep in mind that the specifics of coverage can vary based on your policy and business needs. It’s also essential to review your policy carefully to understand any exclusions. For instance, intentional acts, contractual liabilities and certain types of damages may not be covered.

Some liability exposures may also be covered under additional, separate insurance policies. For instance, product recall insurance may help cover recall situations. In the cases of injuries on company premises or advertising injuries, general liability insurance may step in.

Your agent can help recommend various insurance options that can combine to adequately protect your operations.

Who Needs Product Liability Insurance?

While product liability insurance isn’t legally mandated, businesses engaged in any of the following activities should seriously consider obtaining it:

• Manufacturing
• Distributing
• Wholesaling
• Importing
• Retailing
• Installing
• Repairing/modifying

Distributors Insurance in Palatine, IL

Contact Pitcher Insurance Agency to discuss your insurance needs. We can provide coverage recommendations tailored to your specific operations and risk management strategy.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.