Do I need Product Liability insurance?

Product liability insurance covers the cost of compensating anyone who is injured by a faulty product which your business designs, manufactures or supplies. You should consider product liability insurance if your business designs, manufactures or supplies a physical product which is sold or given away for free.


Your business may be held legally responsible for any injuries to people or damage to property caused by a faulty product. Note that you can be held liable for faulty products even if you did not manufacture them. You may be liable for compensation if:


  • your firm's name is on the product
  • your firm repairs, refurbishes or changes a product
  • your firm imported the product from outside the EU
  • you are unable to identify the product’s manufacturer, or the manufacturer has gone out of business

What it covers

Product liability insurance protects you against the cost of compensation for:


  • personal injuries caused by faulty products
  • loss of property or damage to property caused by faulty products
  • unforseeable events such as product faults your quality control system could not identify

Product liability insurance may not cover you for:


  • faulty products caused by bad workmanship
  • financial losses to a business or person caused by your faulty product

If you do not manufacture the product, but act to distribute it, you should be covered if you can show:


  • products were faulty as supplied to you
  • you provided adequate safety instructions and warnings about misuse
  • you included terms for the return of faulty goods to the manufacturer
  • your agreement with the manufacturer covers product safety, quality control and returns
  • you have quality control and record-keeping systems


You can buy product liability insurance directly from us and other brokers, as well as direct from insurers. Most businesses take out policies that cover them for compensation claims of between £1 million and £5 million.


For more information call 01633 213063 or email us using the form below:

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