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What is Product Liability Insurance?

As the owner of a business, you are liable for any products you manufacture or sell—and if somebody is hurt as a result of using the product, you may be at fault for the incident.

When you ask for coverage from our agency, we will determine the likelihood of a lawsuit being brought against you as a result of one of your products being used. Our experts can identify the risks associated with your products or services and appropriately scale a policy to cover those risks. We can also offer advice on how to make your products less prone to risk. This may involve modifying your product, packaging it differently, or changing any instructions and warnings included with the product. When done well, these precautions can help reduce the company's liability and stop customers from using the product in an unsafe way.

Do I need Product Liability Insurance?

If your company manufactures or sells any kind of product, it is strongly recommended that you have some form of liability coverage. Even products that are widely regarded as 'safe' can malfunction in a way that causes harm to the user, and defending against a lawsuit is usually expensive enough that many companies (and claimants) prefer to simply settle out of court. Product liability insurance can reimburse you for expenses (including defense costs and settlements) that occurred during this process.

Product liability cases that go to court are among the most expensive forms of personal injury cases, and as of 2013 these cases had an average payout of more than $6 million. All companies that obtain this type of coverage are encouraged to have a policy limit higher than the median payout—anything less makes it likely that your company will suffer significant losses if a jury decides against you.

Don't forget to talk to your agent on a regular basis as your business continues to grow. Larger businesses often face larger risks than smaller ones (including, among other things, increased exposure as a result of having more customers who could potentially file a lawsuit). A plan that suffices for a small company may not be enough to protect a large one.

What does Product Liability Insurance Cover?

Product liability insurance mainly covers the legal obligations of a company. This may include payments like:

  • Court fees
  • Legal defense costs
  • Personal injury awards
  • Out-of-court settlements
  • Miscellaneous fees that may occur during any of the above

If you feel any of these forms of coverage are missing from your policy, or if you are starting a business and need product liability coverage, speak to a Sierra Oak Insurance Services agent or request a quote today.

 

1. Ross, Kenneth. "The Role of Product Instructions in Product Liability Prevention." In Compliance. April 30, 2015. Accessed April 18, 2016. http://incompliancemag.com/article/the-role-of-product-instructions-in-product-liability-prevention/.

2. "Settle Your Personal Injury Claim." AllLaw.com. Accessed April 18, 2016. http://www.alllaw.com/resources/personal-injury/settle-your-personal-injury-claim.

3. "Product Liability." III. Accessed April 18, 2016. http://www.iii.org/fact-statistic/product-liability.

Our Location

Sierra Oak Insurance Services

9700 Business Park Drive, Suite 105
Sacramento, CA 95827
Main office: 916-823-8707
Toll free: 888-590-5282
Fax: 916-364-7381

Our Providers

Testimonials

I’m extremely confident with my policy that I have with Sierra Oak. They recommend strong coverage options and make sure that I always have what I need. They constantly keep me informed of new coverage offers and discounts, and they’re also always willing to shop around for better rates. I feel very safe with them and I know that I’m paying for what I truly need and nothing more.

Christina Moore
They always respond quickly, whether it be through email or phone. Upon signing up they gave me a contact list of who’s in charge of what policy so I could save time by contacting them directly. If they don’t know an answer to a question, they’ll find out and get back to me within the day. Great customer service!

Katie Deither
The thing I enjoy most about Sierra Oak is all the people are so easy to talk to! They keep me informed by educating me about different coverage options, terms, and discounts. I use them for my company and when we have an audit, they explain all the reports in an easy to understand way, and also send me anything I need. They’re always right on top of things and never miss a beat.

Cheryl Bridgewater
They know you when you call they know about you, direct contact feel like a person and not another number. I am confident in what they offer, they keep me informed and keep shopping for better rates…the people easy to talk to, they educate me on terms and we have an audit and explain reports and send me anything I need.

Carla Neiswender, Saputo Construction