The cost of product liability insurance depends on the goods you sell, manufacture or trade. For example, the product’s size, how it’s sold, its safety elements and distribution size, etc. Objects like guns and fireworks will have an increased risk factor than fluffy slippers and workout mats.

Other factors determining product liability insurance cost include your industry type, locations served, annual revenue, claim history, policy’s limits and more.

Under the Consumer Protection Act, manufacturers, distributors, suppliers and retailers could be held responsible for damage, injury or death caused by their product or any of its components. However, the party held liable will depend on the specifics of each case.

• The producer of any materials or part of a product
• The manufacturer of a final product or even a part of the product
• The importer of the product line
• Any person who puts a product on the market whose seller or importer cannot be identified

Third-party liability insurance covers compensation claims made against your business by a third party for injury or bodily harm. For example, if a supplier slips on a trailing wire in your facility or if you splash coffee on a client’s computer.

Product liability insurance – often included in a public liability plan – pays for compensation claims about injury or property damage resulting from a product you’ve produced or distributed.

It’s not officially required by law, but do bear in mind that you could be legally accountable for a defective product if: 

• Your business name is on the product
• Your business has repaired the product
• Your company has made changes to the product
• You imported it from outside the EU
• You can’t clearly say who the manufacturer is
• The manufacturer has been out of business