Insuring your business is a common task undertaken by almost every business owner, to make sure that you cause no harm to anyone is the first step, the second is ensuring that those that do get harmed in some way get compensated for the harm done. This is where the insurance comes in, whether your customers get harmed due to incompetence of someone in the staff or due to a flaw in the product there is insurance to provide that harmed customer with compensation to repair any of the damages to their body or property.
There are many ways that a product can be faulty, from defective materials to faulty assembly every product could have a liability which could lead to customer harm. And to ensure that your customers are compensated to either repair the damage or medical costs. Product liability insurance protects a company against claims or suits from products a company has manufactured or sold. It accounts for any type of product that the company provides, be it power tools, food or even the monitor or phone you’re reading this on is required to have product liability insurance.
This type of insurance will help every different type of business, namely a manufacturer of vehicles requires a different kind of liability insurance to a power tool supplier company. And there are two types of claims that the insurance can cover, public and product liability. The difference is between them is that the claim can be made for either personal or property damage. Two examples to specify the difference, in a public claim a construction worker uses your power tools to cut a hole in a wall and he cuts through something he’s not supposed to, that is a public liability. As for a product liability, he tries to cut into the wall and the power tool explodes causing massive damage to the worker and the wall, that is a product liability which is grounds for a lawsuit.
Damage caused by the faulty product is payed for by the insurance company along with the court costs and the compensation for the claimant. With the insurance there are a variety of costs it will cover injury or damage must occur during the period of insurance, not necessarily the supply of goods and services. There are also optional extensions with this type of insurance such as higher limits of indemnity, advertising liability and cover of financial losses during the court case.