What Does Product Liability Insurance Cover?
Businesses are usually at risk of legal and financial liabilities if their products cause bodily injury or property damage. Product liability insurance cover is meant to protect the business from these consequences. Small businesses are at a higher risk because they may not always produce products that work according to their expectations. Call a Jersey City personal injury attorney for legal representation when dealing with such lawsuits.
Types of claims covered by Product liability insurance
Common claims that may come from an unsatisfied customer include:
- Design defect: This claim is made when a product is dangerous or unsafe due to its design. For example, a child’s book with small beads that pose a risk of choking to the child qualifies as a design defect.
- Production flaw: This is when a mistake in the production stage poses a risk of property damage or bodily harm to the customer. For example, a buyer who suffers an injury due to a loosely secured heel is entitled to claim compensation.
iii. Defective warnings: Companies are obliged to offer necessary warnings when it comes to their products. Therefore, when this does not happen, customers have the right to sue for compensation. For example, companies who wrap their products must include warnings on the potential harm of those wrappings. Additionally, ointments companies must warm their customers if the product could harm some body parts.
- Strict liability: Customers who have suffered harm due to the products of a company can sue for compensation regardless of whether it was the company’s intention or not. However, they have to prove that the product actually caused harm, no changes were made after purchase, and they were following the intended purpose.
What is the exclusion of the insurance cover?
Product liability cover offers protection for harm incurred by third parties. Therefore, it would not include people who work for the company or are part of the business. The only compensated parties are customers, clients, and vendors. Additionally, the policy will not cover cases that:
- Were intentionally caused by the business
- Occurred on the business premises
- Resulted due to crime or fraud
- Resulted from the transportation of the concerned product
- For products that are still in possession of the company
Importance of Product liability insurance
Businesses are advised to consider a product liability insurance policy because no matter how keen they produce their products, it is difficult to guarantee 100% safety to their customers. Businesses feel at ease knowing that whatever happens will be compensated provided it is unintentional, and they had taken the necessary precaution measures. This policy only covers businesses for lawsuits against them but does not cover whatever they incur when recalling products.
Dealing with insurance companies
The chances of winning when dealing with insurance companies on your own are very minimal. If you want to get full compensation against insurance companies, call The Law Offices of Anthony Carbone for a free consultation. If the claim is valid, you will receive expert legal representation with high success chances. You will only pay our Jersey City, personal injury attorney after a successful case.