Product Liability Insurance shields businesses from financial consequences of claims related to damage or injury caused by their products.
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Product Liability Insurance covers a spectrum of risks that your products might encounter. These could range from manufacturing defects, design flaws, or inadequate warning labels to misuse by consumers. If someone files a claim against your business because of an issue with your product then this policy can cover legal defense costs, settlements, and court judgments.
Product Liability Insurance provides a shield of protection for your business reputation as well. In a time when news travels fast and a single negative incident can severely harm your business image, having a policy that promptly addresses issues and compensates those affected can be a major asset.
Without product liability insurance, one significant claim could mean the end of the business you've worked so hard to build. With this policy, you can continue your operations, innovate, and expand your product line with the confidence that you're safeguarded against unforeseen liabilities.
Claims need to be initiated within the policy period. The incident triggering the claim must also happen within the policy’s coverage duration.
Your first policy’s start date is carried forward to subsequent policy renewals. Hence, you can initiate claims for incidents that occur post your first policy’s start date assuming that continuous coverage is maintained
The insurance period spans from the retroactive date to the policy's termination date, providing coverage during this entire timeframe.
Businesses involved in manufacturing or selling goods, as well as distributors, importers, retailers, and others interacting with products, require product liability insurance. Clients may also need this policy to safeguard against design flaws and other risks associated with the product. This insurance protects your business from claims or lawsuits resulting from bodily harm or property damage caused to any third party by defective items that your business has manufactured, distributed, or sold.
Pet supply shops
Restaurants, cloud kitchens
Introduction of Consumer Protection Act 2019 has brought significant changes to the product liability landscape in India. It includes a dedicated chapter dealing with product liability, expanding the scope of liability across the supply chain to include manufacturers, product sellers, and product service providers. This means businesses at various points in the supply chain could face liability claims, making product liability insurance all the more critical.
Even with the utmost dedication and care put into crafting your products, they may still fall short of customer expectations. You need product liability insurance because, in case of a lawsuit, it covers legal defense costs and potential damages. Plus, it aids in covering repair or replacement expenses for defective products—even if you aren't sued. There can be design flaws, product defects, poor instructions, labels, or warnings that cause physical harm or damage to the user.
Product Liability Insurance covers the following costs related to the aforementioned claims:
This is an article by YouStory written by Palak Agarwal and published on October, 2022
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