What is Product Liability Insurance?

Massachusetts businesses that make or sell products are exposed to possible risks long after a product leaves their facility. Should a product cause bodily injury or physical damage, the affected person or organization might seek financial compensation for any losses they incur. Product liability insurance helps protect Massachusetts businesses that make and sell products from many of these potential risks.

Product liability insurance generally protects businesses from claims and lawsuits related to products. Some of the potential issues that policies might cover are:

  • Production and manufacturing flaws
  • Product design defects
  • Deficient warnings and instructions

Policies will typically help businesses pay for legal fees and settlements associated with covered claims (up to policies’ limits).

Are Product Liability Policies Expensive?

Because many factors affect product liability policies’ premiums, how much these policies cost can vary a lot. For most businesses, though, policies are affordable -- and cost much less than a product-related claim or lawsuit against a company might. Just defending a business against a claim can be financially devastating for many companies, not to mention how much a settlement could cost.

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Product Liability Insurance MassachusettsWhat Businesses is Product Liability Coverage Right For?

As mentioned, both businesses that make products and those that sell products may want product liability coverage. Additionally, businesses that transport products might also benefit from having coverage. A few specific examples of businesses that should consider getting a product liability policy include:

  • Manufacturers, which might be named in lawsuits related to production defects
  • Distributors and delivery companies, which may be held responsible for issues arising from damage that products sustain during transit
  • Refurbishers and repair companies, which might be sued if a repair causes a product to malfunction and cause harm
  • Wholesalers and retailers, which may be held responsible for any problems that stem from damage that products sustain while in storage or on store shelves

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How Are Product Liability Policies’ Premiums Determined?

As is the case with other insurance policies, insurers take into account many considerations when calculating product liability policies’ premiums. Some of the factors they might consider are:

  • The types of products
  • The number of products
  • What materials the products are made from
  • How the products are used
  • Who the products are used by
  • What instructions and warnings are included with the products
  • Whether the business has previously filed product liability claims

Product Liability Insurance Massachusetts

How Can Massachusetts Businesses Obtain Product Liability Insurance?

Massachusetts businesses have a few different ways to purchase product liability coverage.

Some businesses may already have (or be able to get) product liability coverage through a general liability insurance policy. Not all general liability policies have product liability protection, though, and those that do sometimes only afford limited coverage.

The other options are to purchase product liability coverage as a stand-alone policy or through a package policy, such as a commercial package policy. In most situations, it’s more affordable to get coverage through a package policy, because businesses usually need other coverages as well and insurers frequently provide multi-coverage discounts.

To get help determining which of these is the best way for your business to purchase product liability insurance, contact an independent insurance agent in Massachusetts. An independent agent will be able to requests quotes for general liability policies, stand-alone policies and package policies that might meet your business’ needs. Once you have quotes from different insurers, you’ll be able to decide which one provides the product liability protection your business needs at an affordable rate. Of course, an insurance agent will help with this process, too.

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