Who Needs Product Liability Insurance?

What do investors, manufacturers, distributors, suppliers and retailers have in common?

If you guessed product liability exposure, you are correct. Each of these business people share the risk of product malfunction or danger for merchandise put out to the public.

Here are five different but related types of insurance coverage that can shield a commercial enterprise from loss or damage as a result of error. The following forms of coverage can protect from a liability claim and lawsuit.

Product Tampering Insurance Coverage

Although a business making a product accessible to the general populace is not behind a tampering incident, it can be liable for damages. Product tampering insurance covers you in the event someone else tampered with or warned you of the possibility that a product may be corrupted.

Associated coverage extends to the following.

• Eradication of the manipulated merchandise

• Loss of earnings

• Expenses related to recalling the merchandise

• Costs associated with repairing or restoring products

This type of insurance does not include third-party liability. It also does not cover any related extortion costs.

Product Warranty Ineffectiveness Insurance Coverage

Likened to a specialized surety or bond, the product warranty ineffectiveness policy was first created for investors and/or manufacturers that produced alternative forms of energy sources. The coverage protects form financial damages that occur when there the system does not work as it should. Presently, this form of coverage is also offered to investors and/or manufacturers of other kinds of products.

Product Hazardous/New Products Liability Insurance Coverage

Certain kinds of manufactured products are more liable to hazardous liability. This can include products such as:

• Drugs or medication

• Cosmetic products

• Chemicals

• Car parts

• Other products that are subject to hazard and related damages

For the most part, the specialty insurance market offers hazardous liability insurance for products.

Products Liability-Retroactive Insurance Coverage

This insurance coverage exchanges the policyholder’s claims-made form for an occurrence form. Insurance can be tailor-made to give coverage for:

• A specific amount of time that retroactively protects claims from particular months going back


• Comprehensive occurrence coverage that dates back to initial date of claims-made insurance


• Continuous occurrence coverage that protects against all former acts

It is possible to also gain occurrence coverage by using an insurance policy that increases the time span of detecting the claims-made form that has not been renewed for an identified amount of years or for an unlimited time.

Product Recall Expense Insurance Coverage

The product-recall expense policy gives the insured greater expense coverage – more so than a legal liability coverage. Direct costs involved in a product recall are covered.

Examples of product recall expenses are:

• Communications costs

• Shipping charges

• TV, radio broadcast costs

• Payment to required added employees

• Overtime pay for regular staff

• Product destruction costs