What types of businesses benefit from general liability?

The following business categories frequently purchase general liability insurance: Small businesses/shops Landscaping businesses IT consultants Real estate agents Consultants Marketing companies Cleaning services Independent contractors

product liability insurance Archives

What is General Liability Insurance?
What Does General Liability Cover?
The Benefits of General Liability Coverage for Small Businesses
The Cost of General Liability for Small Businesses
FAQs
Why Your Business Should Have General Liability Coverage
Get General Liability Insurance with EZ.Insure!

What is General Liability Insurance?

General liability insurance is important to have because it covers a wide range of common business hazards including, customer injury, customer property damage, and advertising injury. Additionally, general liability coverage is usually needed in order to qualify for a lease, loan, or to satisfy the terms of certain contracts. When you sign a commercial lease, for instance, a landlord can request to see a copy of your general liability insurance certificate.

What Does General Liability Cover?

General liability insurance covers common liability claims made by third parties (people outside your business). If someone sues your business for physical harm, property damage, or advertising injury, this type of commercial insurance policy will pay for the defense costs. This includes everything from hiring a lawyer to paying for court-ordered judgements and settlements. Your commercial general liability (CGL) policy specifically offers protection for:

Third-party bodily injury – General liability insurance can assist in covering medical costs if a customer is injured in an accident at your place of business. If a customer files a lawsuit because of their injury, your policy will also pay your legal fees.
Third-party property damage – A general liability insurance policy will generally provide financial coverage in the event that your business or one of your employees unintentionally destroys or damages someone else’s property.
Product liability – Not all consumer or property damage takes place inside of a place of business. A company that produces, sells, or distributes goods may be held liable for any damage their products cause. The damage could be to people or property. Product liability insurance is a common feature of commercial general liability (CGL) policies, and aids in covering legal fees and other financial damages brought on by defective goods, incorrectly labeled products that cause harm to consumers, and other product risks.
Personal and advertising injuries – General liability insurance can assist in covering the costs of your legal defense, as well as any settlement or judgment that may be reached, in the event that you or your employee is sued for slander, libel, or copyright infringement.

What Doesn’t General Liability Cover?

On the other hand, there are several things a general liability policy won’t cover, so you will need to purchase other insurance policies to fully cover your business. The list of things that general liability will not cover includes:

Professional errors – Legal actions arising from professional errors, such as unfulfilled services and missed deadlines, aren’t covered by general liability, but should be covered by professional liability insurance, aka errors and omissions insurance (E&O).
Employee injuries – When an employee is hurt at work, their medical bills and disability payments are covered by workers’ compensation insurance, not general liability. In most states, any business with employees is required to have workers’ comp. For more information on workers’ compensation insurance, check out our workers’ compensation state-by-state pages.
Lost or damaged property – General liability will not cover lost, stolen, or damaged property, but you can bundle general liability with commercial property insurance in a business owner’s policy (BOP) and get coverage for the cost of replacing company property. Commercial property insurance also covers damage to commercial property caused by a fire or specific weather conditions.
Employee discrimination lawsuits – Employee claims of harassment, discrimination, and wrongful termination will not be covered by general liability but should be covered by employment practices liability insurance (EPLI), which also pays court costs.
Company vehicles – Business use is almost always excluded from personal auto insurance policies. The majority of states mandate that commercial auto insurance be carried on any vehicles owned by businesses.
Liquor Liability – Legal expenses resulting from situations involving customers who drank at your establishment are covered by liquor liability insurance. This can include reckless driving, physical violence, and vandalism. Businesses that serve alcohol must have this policy. You can either buy it alone or combine it with your general liability policy.

The Benefits of General Liability Coverage for Small Businesses

The majority of businesses need this insurance, particularly if they rent or own office or commercial space. And even if that doesn’t apply to you, small businesses that interact directly with clients and consumers will also benefit from general liability insurance, since this type of policy can keep your business alive if you’re sued by a client or competitor.

And it’s not just small business owners who should consider general liability insurance: independent contractors also benefit from general liability coverage. Independent contractors may be held legally responsible for customer accidents, customer property damage, or advertising injuries, just like any other small business owner, even if they don’t have a physical site or expensive equipment that would require a full business owner’s policy with commercial property insurance.

If you’re an independent contractor, you can also ask your clients to add you to their general liability policies as an additional insured if you don’t want to buy your own general liability coverage. As long as you continue to work for the client who purchased your insurance, you are covered. Remember that if your clients add you to their general liability policies, they may pay a higher insurance premium, and that your insurance coverage will terminate when the contract expires.

How Much Does General Liability Cost for Small Businesses?

According to a recent Hiscox survey, the average monthly cost of a commercial general liability policy is $30. According to the report, only 1% of business owners pay more than $100 each month. And 95% pay less than $50. The cost generally varies based on five factors:

Policy terms – Your general liability insurance premium is impacted by the policy’s coverage limits, deductibles, and other specifics.
Your expenses – The higher your operating expenses, the higher your premium.
Building size – Larger structures increase the likelihood of accidents occurring. Therefore, you might pay more if your business is located in a bigger building with higher foot traffic.
Location – Businesses that are located in high-crime areas may have to pay more for liability insurance.
Claims history – If you’ve previously made general liability claims, your premiums can go up. The more claims you’ve made, the higher your premiums.

Frequently Asked Questions

Does the law require small businesses to have general liability insurance?

Generally speaking, no, but particular businesses, including those in the cannabis and construction industries, may be subject to state mandates. You might also be required to have this type of insurance in order to apply for a professional license in your state, depending on the nature of your business. But it’s important to note that, although commercial general liability (CGL) insurance isn’t normally required by law, your landlord, mortgage lender, business partners, or clients may nonetheless require it.

An ACORD certificate of insurance may be requested by a landlord or client to verify your company’s general liability insurance coverage. This document attests to your company’s capacity to manage any claims for property damage or personal harm. This certificate most importantly gives your property manager, bank, and clients peace of mind that they won’t be forced to foot the bill for a lawsuit against your business.

How much coverage do I need?

You’ll need to make sure your general liability coverage satisfies the necessary policy limits if you need to comply with the conditions of a contract or lease. In any case, you should aim for a level of coverage that corresponds to your company’s needs. Essentially, if you want to be sure that your coverage will cover legal expenses if you are sued. To evaluate your exposures and risk of financial loss, take into account the size of your business, the number of employees, and its business processes.

To give you a better idea of specific figures, most businesses choose a policy limitation of $1 million per incident and $2 million total. This means that the policy will pay up to $1 million to cover a single claim, with a lifetime (usually annual) limit of $2 million. With commercial umbrella insurance, you can expand your general liability insurance coverage if your company faces significant risks. And with umbrella insurance, your maximum policy limit is higher, allowing your insurance carrier to cover more expensive claims. With all that being said, you also need to make sure you can easily afford the deductible for your policy. In an emergency, your insurance won’t kick in to pay for your liability claim if you can’t afford to meet your deductible.

What differentiates general liability insurance from professional liability insurance?

Customer injuries, customer property damage, and advertising injuries are all covered by general liability. Disputes over the quality of professional services are covered by professional liability insurance. Almost all businesses require general liability insurance. But those that offer professional services require additional security against errors and dissatisfied customers. This includes professionals like accountants, attorneys, consultants, and insurance agents. All of which who can avoid costly lawsuits relating to the quality of their work thanks to this professional liability insurance.

For certain professions, general liability doesn’t cover libel, slander, and other advertising-related injuries. This includes those in the media and advertising. Instead, these businesses need professional liability insurance, specifically media liability insurance.

What types of businesses benefit from general liability?

The following business categories frequently purchase general liability insurance:

- Small businesses/shops
- Landscaping businesses
- IT consultants
- Real estate agents
- Consultants
- Marketing companies
- Cleaning services
- Independent contractors

Why Your Business Should Have General Liability Coverage

Without general liability insurance, dealing with judgements, settlements, and legal costs can be exceedingly expensive and can bring a company to its knees. Consider this: just an hour with a lawyer can cost more than $100. Additionally, court costs could approach $75,000 if the case goes to trial. But you might still have to shell out a few thousand dollars even if the judge dismissed the case. Your business runs the risk of going bankrupt if you don’t have general liability insurance. Additionally, if you don’t have general liability insurance, you can lose clients. Since they won’t do business with you without the proper protections.

Get General Liability Insurance with EZ.Insure!

Working with an EZ agent is the best way to buy your general liability policy. Our service focuses on each customer and creates a supportive environment throughout the shopping experience. Along with our personalized service, we provide immediate results. You will see your agent’s info, as well as your free quotes based on your needs, as soon as you submit a form. We want to help you make the best decision and maximize your savings. There is no hassle, no obligation to buy, and no more headaches, and it’s all completely free. To get started simply enter your ZIP code below or call one of our agents today at (855)-694-0047.

What is Product Liability Insurance?
What Does Product Liability Insurance Cover?
What Doesn’t Product Liability Insurance Cover?
How Does Product Liability Insurance Work?
Who Needs Product Liability Insurance?
Why is Product Liability Insurance Important for Small Businesses?
How Much Does Product Liability Insurance Cost?
Product Liability VS. General Liability
FAQs

What is Product Liability Insurance?

Product liability insurance shields businesses against claims that arise when products they manufacture, distribute, and sell cause personal injury or property damage to a third-party. This type of coverage is crucial for reducing the monetary risks associated with defective, dangerous or harmful products. Whether the problem stems from a product’s faulty design, a production error, improper labeling, or lack of warnings and/or instructions, product liability insurance is there to help cover the associated costs.

Product liability insurance exists both as a part of general liability coverage, as well as its own policy. Most commonly covering costs associated with legal defenses and settlements, the coverage enables business owners to meet industry standards while also providing peace of mind when it comes to daily operations.

What Does Product Liability Insurance Cover?

Product liability insurance covers businesses against financial ramifications when a product that they developed, distributed or sold causes harm or damage to another party. Specific areas of coverage include:

Bodily Injury (including burns, allergic reactions, bone fractures, choking, and lacerations, internal damage, dismemberment, and much more).
Illness/Infection (caused by bacteria, parasites, foodborne germs or viruses).
Death
Property Damage (such as structural damage, damage to personal items, vehicle damage, or chemical contamination).
Legal Defense (including court costs, attorney fees, judgments and settlements— whether or not you’re found liable).
Global Coverage (some policies even cover businesses who sell products internationally, if a mishap occurs).
White-Labeled Products (if you buy from a manufacturer or wholesaler, and relabel your products, you’ll still be covered).

While no one expects to be involved in a lawsuit, the simple fact is that they happen. Your business is your livelihood, so don’t leave anything up to chance. By safeguarding your company against legal fees, medical bills, property repairs and more, you’ll be able to focus on what’s most important—running your business.

What Doesn’t Product Liability Insurance Cover?

While product liability insurance is extremely valuable to small businesses, and businesses of all sizes for that matter, it comes with some limitations. Here are some of the most common exclusions:

Product Recalls: Policies don’t cover the costs associated with removing faulty products from the market such as product disposal, consumer notification or shipping expenses.
Intentional Negligence: If there is a known defect in the product, or an intentional failure to alert the public about product safety concerns, costs will not be covered.
Injured Employees: Product liability insurance does not apply if a product injures one of your own employees. Instead, a workers’ compensation policy would cover this situation.
Damage to Company Property: Product liability insurance only covers damage caused to a third-party’s property. If your own property is damaged, you’ll need property insurance to recoup losses associated with damaged equipment, buildings or inventory.
Professional Services: If a problem arises due to a professional service that you offer as opposed to a product, your product liability coverage will not suffice. Instead, you’ll need professional liability coverage, also known as errors and omissions (E&O) insurance.
Visitor or Vendor Injuries at Your Business: If someone is visiting your business location and sustains an injury, you’ll need general liability insurance to be sufficiently covered.

It’s crucial to gain a full understanding of the exclusions and limitations of your particular policy. If you’re unsure about the gaps in your coverage, be sure to talk with your insurance advisor about additional policies, to ensure your business is protected from all angles.

How Does Product Liability Insurance Work?

While we all hope our businesses are never involved in a product-related incident, if one does happen to occur, it’s important to understand the process. Here’s a brief overview of a typical claims process:

Filing a Claim: After an incident takes place, you’ll want to immediately contact your insurance provider and file the claim.
Investigation Period: After the claim is filed, the insurance company will take time to investigate the claim. During this period they will review any relevant documentation, and gather additional evidence to uncover the extent and cause of the damage or injury.
Payouts/Settlements: If the insurer determines that the claim is valid, they will either reach an agreement with the affected third-party, or if required, pursue legal action. Any payments used for settlement will compensate for medical expenses, legal fees and other associated costs.

Who Needs Product Liability Insurance?

If your company makes, sells, distributes, or imports products, product liability insurance is essential to operation. If a flaw in a product you offer results in physical harm or property damage, you run the risk of being held liable, even if your business didn’t manufacture it.

Manufacturers: Legal risks arise from problems in product design, factory-related mishaps, or not enough testing before launching a product.
Distributors and Wholesalers: Companies involved in handling bulk goods can still face liability risks, if a product causes harm down the line.
Retailers: As mentioned, retailers are commonly sued over faulty items even when other businesses manufactured the goods.
E-Commerce Businesses: Online retailers, as well as digital stores that sell other vendor’s products can incur blame for defective or mislabeled products.

Real-World Examples of Product Liability Risks

Toy Distributor: A company that distributes children’s toys unknowingly sends out a shipment of toys that contain high levels of lead paint, which is known to be toxic and cause potential health risks. Even though the company didn’t produce the toys, they are still held liable.
Candle Shop: A locally owned and operated business that makes candles, accidentally sold a batch with wick defects. This particular defect is causing candles to burn unevenly and resulted in a customer’s furniture catching on fire. Now they are being brought to court over the damages.

Why is Product Liability Insurance Important for Small Businesses?

Even with the best quality-control measures in place, product defects still occur through design errors, manufacturing problems, or incomplete labelings. When a customer suffers an injury or their property is damaged due to a faulty product, your business risks paying high costs, like steep medical expenses, legal fees or settlements.

Product liability insurance is especially important for small businesses as they tend to lack the necessary capital to pay for expensive settlements, or court cases out of pocket. With the proper product liability policy in place, businesses can remain protected without jeopardizing their financial stability. It’s important to keep in mind that many product-related claims only require proof of a defective product. This means that even if your business didn’t directly cause the issue with the product, you can still be held liable.

Additionally, while product liability insurance isn’t generally required by law, certain manufacturers, distributors and even e-commerce platforms require businesses working with them to carry this policy. In short, without product liability insurance, you could be stunting your company’s growth, since the lack of a policy may limit your ability to form partnerships and meet contractual obligations.

How Much Does Product Liability Insurance Cost?

Product liability insurance costs an average business anywhere between $500 to $1600 per year. For small businesses, the average monthly cost is about $99. A main factor in determining the cost of your policy depends on the type of business you operate and the risk-level of that business. For instance, home-based businesses tend to see lower premiums while manufacturers, dealing with production on a daily basis may pay more.

Here is a full list of factors contributing to the cost of a product liability insurance policy:

Type of Product: Products that present higher risks to consumers like medical equipment or machinery, generally lead to higher insurance premiums.
Volume of Products Sold: The more products you sell, the higher chance there is of a liability claim occurring. Therefore, more products sold tends to equal higher premiums.
Claims Record: Companies which have never faced a product-related claim will generally be rewarded with lower premiums, as opposed to companies who’ve faced prior claims.
Size of Operation: Small businesses like e-commerce shops or local retailers need less coverage than distributors or manufacturers with large facilities.
Coverage Amount: The selected limits of your policy affect how much you’ll pay on a monthly and annual basis.
Location: The state and local laws of your location may affect the overall cost of your insurance premiums.

Product Liability Insurance VS. General Liability Insurance

Product liability insurance and general liability insurance are both vital in protecting businesses from legal claims, but they have different uses and limitations.

What’s the Difference?

As mentioned, product liability focuses specifically on claims relating to personal injury or property damage arising from products that businesses sell, manufacture or distribute.

General liability on the other hand, covers a wider range of claims such as third-party injuries or property damage caused on a third-party’s property, as well as advertising and reputation damage as a result of general business operations.

Does General Liability Provide Product Liability Coverage?

The short answer is—sometimes. General liability insurance policies do oftentimes provide some level of product liability coverage, but other times it will need to be purchased as a separate policy. If you’re unsure about what your policy includes, just ask the insurance agent that you’re working with. This ensures that there are no glaring holes in your protection plan.

FAQs

If I don’t manufacture the products I sell, do I still need product liability insurance?

Yes! If someone gets hurt or their property is damaged due to a product you sell, you can still be held liable, even if you don’t manufacture anything. While the manufacturer created the product, since you are part of the supply chain, you may face legal claims and be held responsible, if the court determines that you didn’t ensure the product was safe before selling it.

How much product liability coverage does my business need?

The amount of coverage that your business will need depends on a variety of factors such as the risk-level of your products, the volume of sales you make on a yearly basis and the industry you’re a part of. While we encourage everyone to consult with our insurance advisors for a policy tailored to your needs, most small businesses obtain a $1 million per-occurrence limit and a $2 million aggregate limit to start.

What if I discover a defect in my product before any claim is made?

If you find a defect in one of your products before a claim is ever made, it’s important to act as quickly as possible. This may include issuing product recalls, alerting your base of customers, and contacting your insurer. While product liability insurance doesn’t cover product recalls, your provider should be able to offer you supplemental coverage options, or provide you with the next steps to resolve the issue.

Can I combine product liability insurance with other coverages?

Yes! Many insurance providers offer product liability with your general liability insurance policy. With that being said, depending on your business, the risk involved, and the insurer that you’re dealing with, you may need to purchase a standalone product liability policy.

Get Product Liability Coverage with EZ.Insure

Choosing the best product liability insurance policy for your business’s needs doesn’t have to be difficult. To make sure no box is left unchecked, visit EZ.Insure!

EZ.Insure specializes in helping small businesses like yours protect themselves from the unexpected risks that life has to offer. With the help of our side-by-side plan comparison tool, instant access to quotes, and live expert assistance, you can find the perfect product liability policy in no time.

Don’t go uninsured any longer! Enter your ZIP code below, or give us a call at (855)-694-0047 to get started!

Restaurant Insurance 101: Coverages Every Owner Should Have

Today you’ll discover the essential coverages that restaurant insurance offers:

Protection against expensive accidents.

Peace of mind for you and your employees.

And a competitive edge in the restaurant industry.

Let’s get started.

Restaurant insurance is a specific type of business insurance designed to meet specific requirements associated with the food and beverage sector. While it is similar to standard business insurance, restaurant insurance plans focus on protecting against the unique challenges faced in the service industry. This includes issues such as foodborne illness claims, alcohol-related incidents, equipment failures and much more. To combat these particular obstacles, restaurant insurance policies bundle a number of different coverage to form a well-round protection plan.

Types of Coverage Included in Restaurant Insurance

The majority of restaurant insurance plans offer a variety of coverage options, including:

Each of these policies plays a crucial role in covering your restaurant from great financial loss.

But let’s dig a little deeper, to understand why each one is important in its own way.

General Liability Insurance

Especially in a busy setting like a restaurant, whether we like it or not, accidents happen. In simple terms, general liability helps handle these accidents by covering you against injuries to customers or any damage to their property while on your property. For example, let’s say a customer walks to the bathroom and slips on some grease that an employee accidentally dropped. In this instance, general liability insurance helps by paying for their medical expenses and any legal fees if they choose to file a lawsuit.

Property Insurance

Think about what physically makes up your restaurant. This includes your building, the kitchenware, the furniture and any decorations. These are the kind of assets that are protected by property insurance if a natural disaster, fire, robbery or vandalism occurs. If your restaurant suffers from one of these incidents, property insurance provides coverage in the form of replacements or repairs, so you won’t have to pay out of pocket.

Liquor Liability Insurance

Does your restaurant serve alcohol? If yes, then you may be held responsible if accidents occur involving intoxicated customers. Whether it’s a physical injury, damage to your property, or even an auto accident occurring after leaving your restaurant, liquor liability coverage protects against these types of claims. More specifically it pays for any damage taking place on the premises and the cost of court if applicable.

Workers’ Compensation

Since restaurants are fast-paced workplaces, it’s possible for employees to sustain injuries when they’re working. Medical costs and lost income are covered by workers’ compensation if an employee becomes ill or injured on the job. It is a crucial component of any restaurant insurance coverage because it is also mandated by law in every state except Texas.

Product Liability Insurance

As the owner of a restaurant, you are fully responsible for the food and beverages that you serve. If a customer has an allergic reaction or food poisoning as a result of anything they ate or drank, product liability comes in. It plays a large role in the protection of your financial well-being by paying for any medical or legal costs associated with the incident.

Business Interruption Insurance

Not only do unexpected events like fires and natural disasters have the potential to destroy your property, they can also shut down your business for extended periods of time. Luckily there’s a type of coverage to help when this sort of thing happens—Business Interruption Insurance. This insurance coverage helps by covering lost income if your restaurant is forced to close due to a covered event. Instead of risking having to close down permanently, with business interruption insurance, you’ll stay afloat and return to your business when the “down time” is over.

How Much Does Restaurant Insurance Cost?

A number of variables affect restaurant insurance rates. Below is a summary of the factors that could affect your monthly premium:

Location: Higher premiums may apply to a restaurant located in a high-risk location, such as one that is vulnerable to severe weather.

Size: In general, businesses that employ more people and have larger properties pay more in monthly premiums.

Types of Food Served: If your restaurant sells higher-risk food items like sushi or other raw items the risk of foodborne illness increases, which in turn may increase your costs.

Annual Revenue: Larger operations naturally present more risks, therefore restaurants with higher revenues may pay more in premiums.

Depending on the specific coverage needs of your business, monthly premiums vary quite a bit. With that being said, restaurant owners usually pay around $175 per month, or $2080 per year for a $1 million business owners’ policy (provides property, business interruption and liability insurance), according to Insureon.

How to Get the Best Restaurant Insurance Policy

Finding the most suitable restaurant insurance policy is more than simply getting the lowest price; it’s also about finding coverage that meets your company’s specific needs. Here are some suggestions to help you get the perfect policy:

Customize Coverage Based on Your Needs: Since every restaurant is unique, your policy won’t be the same as the restaurant across the street. More specifically, look to find a policy tailored to your businesses specific risks. For example, if you don’t serve alcohol, then don’t invest in liquor liability insurance. However if you do, this coverage is a must.

Check for Coverage Gaps: Be sure to carefully review each policy that you explore and compare, checking for gaps in coverage. Listing out your specific risks and corresponding coverage types ahead of time helps to ensure that nothing is missing.

Compare Quotes and Consult an Expert: Don’t settle on the first insurance package that you see. Instead compare a number of different options to find the one that fits your business best. EZ.Insure’s all-in-one platform makes it easy to consult with an insurance expert, view policies side by side, and get a quote all in a matter of minutes. This comprehensive approach ensures you can find a policy tailored to your restaurant’s unique needs.

Safeguard Your Restaurant Today

Having the proper insurance coverage is essential for safeguarding your business. Don’t wait until your company is in danger from an unforeseen circumstance. Now is the time to act!

Ready to take the next steps in securing your restaurant’s future? Get a free personalized quote today with EZ.Insure, so you can mitigate costly risks and keep serving customers with confidence. To get started, just fill out a quick form, or call us directly at (855)-694-0047.

Looking for more actionable ways to ensure your business is protected against the unexpected? Check our resource library, where we have dozens of informational articles, all aimed at helping business owners save money and reach their goals!

The Importance of Product Liability Insurance for Your Business

Product liability insurance is an essential form of protection for businesses who produce, distribute or sell goods and products. Regardless of how careful you are when producing or selling items, accidents happen. If an accident does happen to occur and it involves injury, damage or defects relating to your product, you could be held liable.

Fortunately, with the proper product liability insurance policy in place, you’ll instead be protected against the financial repercussions associated with the product-related claim. To help you get ahead of these types of potentially costly issues we’ve developed a simple guide explaining what product liability insurance is, risks it protects againsts, and why it’s so important for your business.

What is Product Liability Insurance?

Product liability insurance is a specific type of coverage intended to shield companies against lawsuits pertaining to goods they manufacture, sell, or distribute. These claims usually occur when a product injures a customer, damages their property, or has a flaw that results in harm. This insurance also covers the legal fees related to defending your company.

What Does Product Liability Insurance Cover?

Here are some of the main areas that product liability insurance generally covers:

Consumer Injuries: If a customer sustains injuries as a result of a flaw in your product’s design or function.
Property Damage: Product liability insurance pays for the necessary repairs if your product causes harm to someone’s property.
Defective Products: This insurance covers claims against your business if a product is defective due to a manufacturing error or incorrect labeling.
Legal Defense: Attorney fees, court costs, and any other expenses associated with defending your company in a lawsuit are all included.
Payouts for Settlements: If your company is held accountable for an accident, the insurance pays for the settlement or additional compensation owed to the impacted parties.

Why Your Business Needs Product Liability Insurance

In today’s day and age, lawsuits are quite common. Even the smallest problem with a product can result in an expensive lawsuit. While it’s important to always operate your business carefully with the proper safety measures in place, unexpected errors still happen. Without the right coverage, costs could overwhelm your company so much that you’re forced to take out loans or even worse, shut down for good.

The Risks of Selling Products

To help underscore the importance of product liability insurance, let’s examine some of the common risks involving products and goods.

Manufacturing Defects: Production mistakes resulting in the sale of hazardous or flawed goods to customers.
Flaws in Design: Even when dealing with high quality materials and top-of-the-line engineering, design flaws are possible and can put users at risk of injury.
Inadequate Labeling or Lack of Warning: Accidents or injuries stemming from mislabeling, or missing safety warnings result in your business being held liable.

A study from the Insurance Information Institute found that the average cost of a product liability claim can range anywhere from tens of thousands to millions of d

ollars, depending on the severity of the damage. Without product liability insurance these costs have the potential to devastate your business, even if they’re on the low end of the average cost scale.

How Product Liability Insurance Protects Your Business

This coverage serves as a financial safety net, covering the costs of legal defense, medical bills, and future settlement payouts. No matter if you’re a small or large business, the impact caused by product-related lawsuits can be extremely costly without the right insurance in place. Here are the main protections that product liability insurance offers:

Legal Costs and Fees: If a lawsuit is filed, the cost of legal representation can mount quickly. You won’t have to pay for your defense out of pocket thanks to product liability insurance, which covers these expenses. Also, product liability covers any additional lawsuit fees.
Medical Expenses: If a consumer sustains injuries because of a flaw in your product, insurance pays for their medical bills
Settlements and Payouts: A product liability policy will also cover the settlement and payout costs, if your company is found liable for a product defect.

Real-World Example: In 2017 there were multiple court cases involving exploding smartphone and electronic-cigarette batteries, where consumers were injured due to faulty equipment. In one case, the claims and defense costs totaled over $200,000. Luckily for the company at hand, their product liability insurance covered the expenses.

How to Get Product Liability Insurance

Getting product liability insurance for your business is a pretty straightforward process. First, you must consider the variables that affect your coverage. Insurance companies usually take the following factors into account when estimating premiums costs and the necessary level of coverage:

The Types of Products You Sell: Different types of products come with different levels of risk. For example, common household items like a table, come with far less risk than electronic or medical devices. If the products your company offers have high risk levels, it’s crucial to invest in product liability protection.
Sales Volume: The higher volume of products that you sell, means the higher chance that a product-related incident will occur. This increased risk may affect the cost of your insurance premium.
Business Size: The size of your business may also affect the monthly premium cost for product liability insurance. In general, premiums will be cheaper for smaller companies in comparison to large corporations.

Once you’ve taken some time to consider these factors, the next step is to work with a trusted insurance provider such as EZ.Insure. EZ.Insure’s process makes getting matched up with a quote and quality insurance plan quick and simple. With the help of our coverage comparison tools and expert insurance agents , you can get the coverage your business deserves!

In a Nutshell

For business selling, manufacturing or distributing goods, product liability insurance is a must. This essential coverage shields your company from costly financial risks stemming from product-related claims. Whether it’s legal fees, settlement costs, or medical bills, product liability has got your back.

Just because you haven’t had any product-related accidents yet doesn’t mean they can’t occur. Instead of wondering what might happen, be proactive by preparing for the unexpected. To take the next steps and get a free product liability insurance quote, just visit EZ.Insure and enter your zip code, or call us directly at 855-694-0047.

Tag: product liability insurance

Jump To:

What is General Liability Insurance?

What Does General Liability Cover?

The Benefits of General Liability Coverage for Small Businesses

The Cost of General Liability for Small Businesses

FAQs

Why Your Business Should Have General Liability Coverage

Get General Liability Insurance with EZ.Insure!

What is General Liability Insurance?

What Does General Liability Cover?

What Doesn’t General Liability Cover?

The Benefits of General Liability Coverage for Small Businesses

Compare Commercial Insurance Plans

How Much Does General Liability Cost for Small Businesses?

Frequently Asked Questions

Does the law require small businesses to have general liability insurance?

How much coverage do I need?

What differentiates general liability insurance from professional liability insurance?

What types of businesses benefit from general liability?

Why Your Business Should Have General Liability Coverage

Get General Liability Insurance with EZ.Insure!

Compare Commercial Insurance Plans

Restaurant Insurance 101: Coverages Every Owner Should Have