Product Liability Insurance for Manufacturers

Manufacturers’ insurance needs have a lot in common with the insurance needs of most businesses as they normally carry worker’s comp and property insurance. However, a manufacturer must also carry product liability insurance due to the fact that there are many unique risks involved in the manufacturing segment. These risks can run the gamut from patent infringements to recalls to bodily harm done as a result of faulty products.

Product liability insurance provides a manufacturer with protection from these rather unique risks and in particular when products cause harm to others. Any company that manufactures or distributes products to be used by the general public face liability lawsuits. While most businesses carry liability insurance to cover slips and falls, this type of insurance does not cover injury or property damage caused by products.

Manufacturers product liability insurance

Generally speaking, if a company manufacturers any of the following products it should have very good product liability coverage.


-Components that go into your own products or into other manufacturer’s products

-Textiles and leather goods

-Items made with moving parts which can do bodily harm

The U.S. Consumer Product Safety Commission’s findings tell us that deaths, injuries and property damage from product-related incidents cost the United States over $700 billion each year. Nearly all products, to some degree or another, are potentially hazardous. Even if a person’s actions are responsible for them becoming injured while using a product a savvy attorney will accept the claim in attempts to cash in big – both for the sake of his client and for lining the pockets of his law firm. And, more often than not, it is the manufacturer who becomes the target of this type of lawsuit. This makes having a very good product liability insurance policy extremely important.

In short, product liability insurance for manufacturing protects a manufacturer from unpredictable liability that arises from property damage or bodily injury caused by its product(s). It covers the attorney fees as well as the actual damages caused by the product(s) in question. This type of insurance plan can be designed so that it covers any costs associated with product recalls wherein faulty products must be removed from store shelves and destroyed or stored away.

Any head of a manufacturing company that would like to know more about product liability insurance options should seek out a reputable insurance provider that specializes in this type of insurance. This way the coverage can be carefully explained to them and a policy can be drawn up which best meets the manufacturer’s needs.

As a manufacturer, you should be aware of the fact that before issuing a policy, the insurer will want to know that your manufacturing is carried out in accordance with industry standards and that the personnel working within your company are fully trained. All equipment used within your company also must be up-to-date and maintained so that it meets state and federal standards. Having a good quality control system in place may help in reducing your premiums and will of course reduce the risk of compensation claims as well as protect the reputation of your company.