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Products Liability insurance provides cover for a business if the goods or services they supply to a customer go on to cause damage or injury.
An example would be a garage that receives a delivery of tyres. If a stack of tyres were to fall over and injure someone while they were being delivered, any injury would be covered under the Public Liability policy of the delivery firm. If however the stack fell after the delivery firm had left the premises, the delivery firm would require a Product Liability policy to cover them against any resulting claim.
According to the Consumer Protection Act (1987) any product a business supplies (or gives away) must be ‘fit for purpose’ and the supply of unsafe goods is regarded as a criminal offence. In this respect Products Liability insurance is essential for any business that manufacturers or supplies products to the trade or public.
Product Liability is often arranged together with Public Liability but it is important to note that while the amount insured under a Public Liability policy is on a ‘per claim’ basis, with Product Liability the insurance is on an aggregate basis – in other words, if the policy cover is £5m, this is the total amount insured for the year, irrespective of the number of claims made.
You will be protected against any claim made against you for products made or supplied by you that go on to cause damage or injury.