February 29, 2020
What is Product Liability Insurance?
What is product liability insurance for small businesses?
Your business is responsible for making things right. Product liability insurance can help protect you in the event that your business faces a lawsuit. In 2014, there were 58,496 personal injury/product liability cases – a 20% increase from 2013. One law firm found the average jury award in product liability lawsuits in 2012 was $3,439,035, with the median award totaling $1,503,339.20. With an increase in claims and the high cost of lawsuits, product liability coverage has become all the more important for small businesses.
Getting hit with a product liability lawsuit is an expensive and stressful experience. Product liability insurance covers the legal fees that could otherwise lead to major hardship. Also, the insurance covers medical costs, compensatory and business damages.
How much product liability insurance does your small business need?
How much coverage to buy depends on what and how many products you sell, the volume of sales and the number of parties involved in production. As a rule of thumb, the more output, the greater the likelihood one of the products could have some type of defect. As your small business grows, this could become a bigger concern over time.
Product liability insurance is a must even if your role in the manufacturing, sale or distribution process is marginal.
Article retrieved from https://www.nationwide.com/what-is-product-liability-insurance.jsp