Product Liability

What is Product Liability Insurance?

Product Liability insurance provides coverage for claims against manufacturers and sellers of products to the general public like tires, power sports, tools, dietary supplements and other goods. It offers protection to manufacturers or sellers for losses or injuries to a user or bystander caused by a defect or malfunction of the product, and, in some instances, defects in the product’s design or inadequate warning labels. When it is part of a Commercial General Liability policy, coverage is often referred to as Products-Completed Operations insurance.  Below are the most common scenarios that can result in a Product Liability claim.

Why your company may need product liability insurance?

If your company manufactures any kind of product, from tires to engines, computers to clothing, it could easily find itself on the wrong side of a lawsuit by a plaintiff claiming your product(s) caused some kind of injury or damage. In today's litigious society, it is not even necessary for you to be the manufacturer of the product. Sellers are often sued alongside the manufacturers.

Product liability exposure lasts as long as the product is in use. Someone may be injured or damage may result from use of the product years after it was manufactured and the product may no longer be in production. Product liability insurance should be kept in force as long as the products are being used and could cause injury or damage. Because of the continued liability exposure, insurers require insureds to provide detailed information about discontinued products.

The basic premise of most product liability lawsuits is that the product manufacturer or vendor failed to take appropriate steps to insure the product was safe and sound. It is impossible to eliminate all hazards in connection with many products. No matter what you do, someone could fall off a ladder or burn themselves with a hair dryer, and so forth. To show that you did everything possible to prevent such injuries, it is critically important to communicate with buyers and users of the product about such hazards. The thing to remember is that if there is a lawsuit, your best defense is to prove you took all reasonable measures to assure no one would be injured.

HOW MUCH DOES IT COST?

Total Insurance Premium = Total Estimated Annual Sales x Rates (per $1000)

Factors that determine rates

1

Type of Business

Some industries are riskier than others, and the nature of your business is factored into your cost.
5

Deductible

The amount of loss expenses the insured is required to pay before the insurance carrier starts to pay the claim.
6

Policy form

Occurrence vs Claim made.
7

Special Endorsements

What Product Liability Insurance Covers

1

Bodily Injury

In the event that somebody is injured by your product, product liability insurance can cover the cost of care, lost wages, restitution for wrongful death, or legal fees (if you’re taken to court.)
2

Property Damage

In the event that property is damaged due to your product, product liability insurance can cover the value of physical damage, repairs, lost profit due to damages, and legal fees (if you’re taken to court.)

Who do we help cover?


Tire manufacturers and tire importers




Wheel manufacturers and wheel importers




Aftermarket parts suppliers






Motorcycle, ATV/UTV, go-cart and scooters manufacturers and importers



Generators and hardware



Inflatable products wholesalers



Bicycle wholesalers



And other hard-to-insure industries


Case Studies

More than 8,000 motor vehicle accidents per year are caused by tire failure. Many of these failures are the direct result of a manufacturing or design defect. Defective tires can be the result of many factors, including poor design, faulty or incompatible materials, improper tire storage or flawed production and manufacturing. 

Contact us today for more information

Your product liability experts in the tire and motorsports industries