Is Product Liability Insurance Included in General Liability?

Product liability insurance offers valuable protection for businesses. However, the only coverage many companies opt for is general liability insurance. It’s the least expensive variant and often provides comprehensive protection against damages and losses related to business operations. But is product liability included in that, or do you need to buy a separate policy? Thankfully, we have all the answers for you right here. We’ll talk you through the coverage and what your next steps should be. Let’s get started!

What Does Product Liability Insurance Cover?

General liability coverage offers financial compensation to small businesses in case of accidental damages and injuries that occur on or near the property. In contrast, product liability offers protection when someone claims damages, property loss, or personal injuries due to the use of your products or services. Beyond covering court-ordered adjustment or settling costs, product liability also pays for an attorney and other legal fees if someone raises the claim that they suffered physical damage because of the product you made. Likewise, your business is also covered for any property damage caused by the product. This insurance also safeguards against the expenses associated with illnesses or accidental deaths caused by the use of products like cosmetics, food, etc.

Who Can Benefit from Product Liability Insurance Protection?

All small businesses selling products or services (whether these are manufactured, imported, or distributed by them) could benefit from product liability insurance. In the case of manufacturers, this policy can be a crucial defence against manufacturing risks. While these risks can raise the premium associated with the policy, they can still save your business huge amounts of money. Those providing food services pose a similar risk, especially for health, where they can expose clients to illnesses and death. If a customer falls ill after receiving your services and decides to sue your business, product liability protection will cover the costs of the legal process. You can benefit from similar coverage in the cosmetology or hairdressing industry, too, not only because of the services you offer but also because you can unknowingly distribute substandard products that may harm your clients. Product liability will help defend your company’s reputation and reimburse all costs of eventual legal proceedings against it. It’s one of the many types of commercial insurance that can protect your company from huge financial harm. Working in a supply chain industry as a wholesaler, distributor, or retailer, it’s a good idea to ensure you have not only general liability but also product liability insurance (or that the latter is included in your general policy). When customers can’t directly start a legal proceeding against the manufacturer, they’ll file a claim against those lower in the supply chain for selling or distributing faulty products.

Is Product Liability Insurance Included in the General Liability Coverage?

This depends on your provider. General liability policies include many different coverages, and product liability may or may not be one of them. Some insurers incorporate this coverage into a general liability policy, while others will offer it as an add-on. When purchasing these policies separately, you might be offered them in a bundle, making it more convenient to buy and pay. If you’re shopping for a general liability insurance policy and want to make sure product liability will be included, ask your insurance broker to provide you with a printout or email confirmation of all that’s covered within the policy you are considering. If you already have a general liability policy for your company and aren’t sure whether it includes product liability protection, check your policy. In a certificate of liability form, you find product liability under the “Products” section. If your policy has this coverage, it will list the coverage amount. In a coverage document, product liability is listed as separate coverage on the page where you’ll find all the other coverage options included in your policy. If you can’t find this specific protection in either of these documents, it’s likely not included in the policy. However, you can verify this by contacting your insurer. Weighing in your risks and the potential benefits of product liability insurance for your company’s bottom line, you may wish to purchase this additional coverage. Alternatively, you can shop around for another general liability policy that includes this protection. Whether you want to invest in product liability insurance depends on the number of parties involved in the production and distribution, what and how many types of products or services you’re providing, the volume of sales you’re generating through these products or services, and the number of goods made or provided by your business. Choosing a suitable insurance plan would pay dividends because it protects your small business.

Final Thoughts

General liability insurance coverage varies from one provider to another. Some insurance companies will include this type of protection in their policies. Meanwhile, others will require business owners to purchase a separate product liability policy. With many providers, the two policies will often be offered in a bundle, which can make them less expensive. In any case, having product liability insurance is always a good idea, especially if you have a high risk of physical or property damage. If you need general liability insurance, then make sure to give Ron Johnston Insurance a call. We’ll be happy to talk you through the process and give you a quote today.