Hayes Brokers believes that every business should have insurance. The type of business you own and the operations of your business will determine the types of insurance policies you will need.
If your business makes or distributes products to consumers, it is imperative that your business have either a general liability policy that includes products liability or a stand-alone products liability policy.
What Is Products Liability Insurance?
The Insurance Services Office (ISO) defines a products and completed operations hazard as “‘bodily injury’ or ‘property damage’ occurring away from premises you own or rent and arising out of ‘your product’ or ‘your work’…” (CG0001 Page 15). While this is a standard definition, it may vary slightly by insurance company and policy.
It is important to note that products liability covers not only a physical product, but also work product such as building and installation. This coverage is triggered by bodily injury (including death) or property damage. However, products liability insurance does NOT cover product recall.
Do You Have Products Liability Insurance?
The best way to determine if you have products liability coverage is to review your policies with your insurance broker. While this coverage is often included in some policies, the coverage may be excluded for certain business sectors including those that manufacture or distribute the following types of products:
- Products for children.
- Consumables (food and drink).
- Products that are applied to the body (pharmaceuticals and cosmetics).
- Medical products.
- Holistic health care products.
- High risk products such as firearms, power tools and large machinery.
In these cases products liability insurance coverage is available as a stand-alone policy and can be tailored to meet the needs of the individual business.
How To Protect Your Business
Nearly every business produces some sort of product, even if it isn’t a physical object. What steps do you take to ensure that your products are safe for consumers? Third party testing is a must. There are many companies that provide independent third party testing, including UL labs.
Do you have products liability insurance? Does it truly cover your products exposure? Are your insurance limits sufficient?
Contact your Hayes Broker today to schedule a free, no-obligation risk management analysis to determine which products liability coverage is right for your business.