One size of insurance policy does not fit all. Manufacturers, distributors, and store owners all need different types of insurance to protect them from claims made against product manufacturing flaws, product designs that are unsafe, and improperly perfected product warning labels. Product liability insurance is designed to pay for expenses if a consumer, bystanders, or their property suffers any damages from a product.
Product liability insurance is sold to businesses based upon their specific activities and the number of products that are entering into consumer possession via their care. Some types of products have a higher rate of court actions than others, and these categories will often be assessed as needing a higher value of insurance. Examples of higher risk categories include: children's toys, all medical, prepackaged food, and all areas of the sports and automotive industry.
The only way to judge what a product liability insurance policy will cost for your manufacturing business, distributorship, or store is through a careful assessment of your product participation through a highly qualified insurance agent, and possibly through your attorney as well. Awards for product liability injury or death cases are often extremely high, and based upon a jury sympathy level. Insurance premiums are
not inexpensive for higher risk businesses, but it never pays to cheat in order to bring costs down.
A very common method of bringing the insurance premium rates down is through under-reporting of product production or sales. Unfortunately, this user-trick is very well known and can only cause problems if the product liability insurance must ever be used to pay expenses on a claim. For product manufacturers and distributors, if a recall happens for a given product, and insurance reporting has only shown a part of that stock to be in existence, the insurance company can refuse services when they are needed the most. Manufacturers and distributors must always be very honest on the product reports.
Currently, there is a group attempting to lobby for fairer product liability laws to be placed upon the books for the United States, but until these new laws become a reality, all manufacturers, product distributors, and stores carrying products must take steps to protect themselves through buying a product liability insurance policy. When consumers go to court to discuss damages that a product has caused, they will almost always name the manufacturer, the distributor, and the store that sold the product on the lawsuit.
Author Resource:-
Gemma-Leigh Garner is a freelance copywriter that authors articles & information surrounding product liability insurance & other business insurance needs.
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