Whether you are in the business of distribution, selling, or manufacturing, you know that accidents can and do happen. With this, the safety of your products is on the forefront of your success, especially since some products are more inherently dangerous than others. Risking having one of your products injure or harm a buyer/consumer could result in legal action from a product liability lawsuit. As a business owner, you need to ask yourself whether you have the right type of small business insurance protection in place to safeguard you and your business from product related claims that may result in substantial financial expenses.
Product Liability Insurance Explained
This type of insurance is designed to protect you and your business against potential claims that may arise due to a faulty product(s) you sold. Furthermore, coverage extends to the cost of judgements, legal defense and legal settlements that are incurred once you are faced with a defective product liability claim. A small business that does not have this type of protection could be faced with some serious financial and legal effects if you get sued. Keep in mind that all insurance policies have certain exclusions, provisions and limitations, so if you have any questions on product liability insurance, it is recommended you contact your local Alabama independent insurance agent.
What is Typically Covered Under Product Liability Insurance?
There are some basic things to contemplate when acquiring this specialized form of coverage for protection for a business like yours. It may afford coverage for a variety of circumstances in which you could be held legally liable for injuries and harm suffered by a consumer. Below are some scenarios that are typically covered:
- Strict Liability- This is a standard of liability that does not depend on actual negligence or intent to harm for there to be a legal claim.
- Faulty Design- A product can become a risk hazard when there is a design flaw in the product, making it a risk exposure for injury or harm to the consumer.
- Faulty Marketing- This is when a product is marketed in a way that fails to warn customers of possible hazards or if the marketing misleads consumers in their advertising procedures.
- Defective Manufacturing- This poses a problem when a product becomes dangerous from a mishap in the manufacturing process.
- Improper Instructions/Warning- Failing to let consumers know of potential risks when using the product can lead to a product liability claim.
While product liability insurance may provide key protection for the situations listed above, it doesn’t cover every potential risk. Examples of scenarios not covered include, Cyber Liability, Workers Compensation, and E&O (Errors and Omissions) Coverage.
Protection for Your Alabama Small Business When You Need it the Most
Whether you are in the business of assembling, selling, manufacturing or distributing goods/products, you should follow some key considerations surrounding product liability coverage:
- Communicate with Your Alabama Independent Insurance Agent– Keep the lines of communication open with your independent insurance agent to ensure he/she knows and understands your specific business needs.
- Pinpoint Your Territory– Discuss this with your agent to ensure you have coverage in all the areas your products are being sold.
- Assess Your Business Risk Exposure- Evaluate and realize your risk exposure to identify the possibility of liability claims and acquire the needed coverage limits to adequately protect your small business.
Product liability insurance can be purchased for a nominal fee for peace of mind that doesn’t come with a price tag. Depending on the type of products you distribute, manufacture, or sell, along with other factors such as your business size and the inherent risk exposure of what you are offering, is dependent on how much coverage you may need. Burkett & Associates is here to assist you with all your Alabama business needs and we can answer any questions you may have regarding product liability insurance or any other Alabama business insurance protection that you need. Don’t wait! Call us today at 256-704-7400.
