What Industries Need Product Liability Insurance?

April 14, 2020

Insurance is necessary for businesses of every shape and size as it protects you financially if things go wrong. If you provide products to your customers, it’s important that you protect yourself from claims for related damages with product liability insurance. So, how do you know if this form of cover applies to you? As the experts in public and public liability insurance Perth, we’ve seen first-hand the importance of ensuring that your business has product liability cover in a place where necessary. Let’s take a closer look at product liability insurance and how it applies to your industry.

What is product liability insurance?

Most of us have heard of public liability insurance, which protects you financially if you cause damage to property or injury to a person as the result of your actions at work. But what happens if the damage or injury is caused by products that you’ve installed? That’s where product liability insurance comes in.

Product liability insurance protects you financially if the products that your business has supplied or installed causes personal injury or property damage. It also covers your legal bills if you’re required to hire a lawyer for the purposes of a product liability claim. 

Why is product liability insurance important?

If you provide products to customers, you need to make sure you’re protected with product liability insurance. This type of cover is generally applicable to businesses who manufacture products for the public. Many businesses make the assumption that they don’t need product liability protected if they don’t sell or manufacture anything directly. However, it doesn’t just apply directly to the manufacturer – you also require cover if you install products, associate your business with a product, import the product or carry out assembly. 

A product liability claim can be expensive for a business and even if you’re not found liable, you may still need to hire a lawyer to defend the claim which can be expensive in itself. 

What industries need product liability cover?

There are a number of industries which require product liability insurance Perth– let’s look at some of the main ones that we work closely with.

Manufacturing Industry – the manufacturing industry is one of the main areas that requirement this type of cover. If you manufacture items which are defective, resulting in damage or injury, you’ll be liable for damages. For example, if you manufacture furniture which is defective and results in injury, this would be covered under product liability cover.

Healthcare Industry – in the healthcare industry where products could include medical devices and pharmaceuticals, product liability insurance is essential to ensure that damage or injury caused by these products is covered. In most cases, this would be an issue directly with the manufacturer.

Food Industry  – product liability insurance is essential in the food and beverage industry. For example, a company may produce a food product which is incorrectly labelled as not containing nuts and an allergic reaction occurs. Another example would be that a food product contains foreign material, such as plastic. This would be covered by product liability insurance.

IT Industry – although you may not think of the IT industry as requiring product liability insurance, there are certain scenarios which would require this cover. For example, you may install software which is defective and causes damage to a computing system. In this type of situation, product liability insurance will cover you. 

Textiles Industry – clothing and textiles companies should have product liability insurance in place due to the specific risks associated with their products. For example, you may produce clothing which is treated with a dye that causes irritation to the skin or which causes illness due to being a hazardous substance. In this case, this scenario would be covered in product liability cover.

Every business has different insurance requirements and it’s best to speak directly with your insurance broker to see whether product liability insurance is necessary. 

What doesn’t product liability insurance cover?

As we’ve discussed, product liability insurance covers personal injury or illness caused by a product, property damage related to a product, or software damage. Common scenarios covered by product liability cover includes manufacturing flaws, defective instructions, lack of warnings, or design defects. 

However, there are certain things that product liability insurance won’t cover. These include deception about your product where you haven’t disclosed elements of the design, failing to notify of significant changes to a product, incorrect advice about the product, or products that involve asbestos.

The exclusions attached to your product liability insurance will depend on the specific policy. Always read the fine print of your policy or speak with your insurance broker so you fully understand what your cover includes.

How much will product liability insurance cost?

There are a number of factors which may influence the cost of your product liability insurance. These could include the size of your business, the type of work that you undertake, the location of your employment, whether you have employees working for you and your history of insurance claims. Generally, you’ll find that product liability insurance is included in your public liability insurance policy. If you specifically require product liability policy, take a look at your public liability policy or speak directly to your insurance brokers in Perth.

Leading the Australian insurance industry 

GSK Insurance Brokers are one of Australia’s leading insurance brokers and we lead the industry when it comes to protecting the risks facing Australian businesses. Our experienced team of insurance brokers will analyse your situation to identify your specific risk exposures. This allows us to provide tailored insurance solutions for your business. We’ve worked closely with our clients for over 35 years which means we have the knowledge and experience to deal with your insurance needs, no matter the size of your business. Speak to our team today to find out how we can support you and your business.

If you have any questions at all about product liability insurance, contact GSK Insurance Brokers today on (08) 9478 1933.