product liability

A business purchases product liability insurance to protect themselves from liability against the allegation of negligence in the manufacturing, packaging/labeling, warranty, distribution, or sale of its products. The 1987 Consumer Protection Act holds manufacturers, distributors, retailers and others liable for products that are not “fit for purpose” and personal injuries or illness to a third party that may result from their unfitness.

The year 2006 saw the peak in product liability lawsuits; accounting for 20 percent of all cases tried in federal court compared to about 12 percent the following year. Product litigation tends to go in trends with people jumping to sue on common issues such as asbestos in the workplace or prescription drug side effects. Some jurisdictions require that companies carry product liability insurance to protect consumers in the event of widespread consumer injury.

One way that companies can reduce their risk of manufacturing negligence is to have capable quality control supervisors on staff. The 2008 recession which saw thousands of manufacturing layoffs put manufacturers at risk for product negligence and caused companies to increase their product liability insurance policy limits. Big business knows that a massive judgment against them could cost into the billions and potentially put them out of business.

Companies Rush to Buy Product Liability Insurance

What Does Product Liability Insurance Cover?

Product Liability Insurance Covers:

  • claims resulting from damage to property or personal injury caused by the company’s products
  • unforeseen circumstances, such as defects in products missed or unidentifiable by the quality control system
  • the cost to defend against a lawsuit and any judgments that may be entered against a business up to the policy limit

Product liability insurance is generally available even if the business is negligent, subject to certain policy exclusions. Most polices do include exclusions for intentional acts and deliberate wrongdoing.

The Price of Coverage

The price that a given business will pay for product liability insurance depends on the level of coverage sought and the assessed risk of the products. The minimum coverage level is typically $1 million and runs for one year with the option to renew. A licensed product liability insurance broker can help a business determine the correct level of coverage for their business.

The most common product liability claims in the U.S. are negligence, strict liability, breach of warranty, and a variety of consumer protection claims. Most product liability laws are determined at the state level and vary widely from state to state. If you or a loved one was injured due to a faulty product, an experienced product liability attorney such as those found at Tario & Associates, P.S. can help you navigate your legal options.

If you or a loved one were injured in an accident, you have enough to deal with. Let an experienced accident attorney fight for the full compensation that you deserve. It is not uncommon to receive a settlement from the insurance company that is five to ten times bigger with the help of a lawyer. Call the caring accident attorneys at Tario & Associates, P.S. in Bellingham, WA today for a FREE consultation! We have been representing residents of Whatcom County, Skagit County, Island County and Snohomish County since 1979. You will pay nothing up front and no attorney fees at all unless we recover damages for you!