Product Liability insurance

Product liability insurance coverage — included in NEXT’s general liability insurance policy — can help protect a manufacturer, retailer or online seller from some legal costs if a customer alleges that a product defect caused them injury or property damage.

Your brick-and-mortar retail shop or online store can be held liable even if you weren’t negligent in creating of the product. And the more products you sell, distribute or produce, the greater your need for insurance for product liability.

A product defect could land you in a legal situation due to:

• The design of the product.

• The manufacturing of the product.

• The marketing of the product (such as unclear instructions or missing product warnings).

Almost any product has the potential to cause injury or damage. For example:

• A bath soap sold in your boutique causes an allergic reaction that requires medical care.

• A child chokes on part of a toy purchased in your e-commerce shop and needs emergency intervention.

• Expired snacks at your convenience store cause food poisoning badly enough to merit a visit to the doctor.

• Your store sells electronic equipment that catches fire in the customer’s home, causing property damage.

Product liability insurance cannot be purchased as a standalone policy.

Who needs insurance for product liability?

You may benefit from product liability insurance if you own a retail store or e-commerce small business that sells, makes, repairs or distributes physical items.

It is commonly purchased by business owners who sell or distribute products directly to consumers. This could include:

• Retail shops and kiosks

• Small businesses that source and sell products online

• Amazon or Etsy sellers

• Wholesalers

• Drop shippers

Even if you don’t make or manufacture the products you sell, your business is part of the supply chain and you can still be held liable for product defects that injure someone or cause property damage.

If your store is accused of selling or manufacturing a defective product, product liability coverage may help to cover:

• Legal fees. Such as legal defense costs, verdicts or out-of-court settlements.

• Medical costs. If your product is found to be defective and incurs care for your customer, it could help cover these fees.

• Property damage. If you sell a defective product that causes damage to your customer’s property, this could be covered by your policy.

Product liability insurance can help a lot, but it does not cover all types of damage or injuries, including:

• Product recall costs. This would be covered by a separate policy specifically designed to cover recalls.

• Employee injuries. Workers’ compensation insurance, required to cover employees in most states, can help with protection over workers who suffer a work-related illness or injury.

The cost of product liability insurance, included in your NEXT general liability insurance policy, can vary based on a number of factors, including:

• Product type. Products that are more likely to cause harm could have higher premiums.

• Revenue. The more you sell, the more you'll potentially pay for insurance.

• Your business operations. Manufacturers could expect to pay higher rates than distributors.

• Location. Based on if your business is online or if you have a storefront.

• Claims history. If you’ve had claims in the past, your insurance costs could be higher.

You could save up to 10% if you bundle your general liability coverage with an additional policy, such as workers’ compensation insurance to cover work-related injuries or illnesses for your employees.

The best way to learn exactly what you’ll pay for your monthly or annual cost is to get a free general liability insurance quote online with NEXT. It’s no obligation, and it takes about 10 minutes to see your exact price.

Start a free quote for product liability coverage.

Product liability insurance is included with NEXT’s general liability insurance policy for retailers and online sellers. You cannot buy product liability on its own.

You can get general liability coverage 100% online in about 10 minutes. And get your certificate of insurance immediately after payment at no additional cost.

Start an instant quote to see options and an exact price customized for your business. If you like what you see, you can adjust the package limits and buy. Your insurance will begin immediately after payment.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Start a free online quote with NEXT today.