Product Liability Insurance

Do I Need Products Liability Cover?

Products Liability Insurance is not a compulsory class of insurance.

However as litigation becomes more prevalent, it has become the norm for businesses to take out this type of cover. If you have a claim made against you or your business then product liability insurance should make the outcome less likely to be as damaging.

Having products liability insurance will provide you with peace of mind, knowing that any potential claims will be defended on your behalf by your insurer. You will be saved the considerable time and energy and cost in defending your case.

Example

I'm a small electrical retailer - why do I need product liability insurance?

Even if you only sell goods and don't manufacture them, you still have a legal responsibility not to sell dangerous goods.

Be aware too that often the manufacturer is no longer in business and the importer can't be traced, in which case the shop owner could face a liability claim.

Under law, wholesalers and retailers alike are liable if they can't identify the producer, importer or "own-brander" (a supplier who puts their own label on the product to give the impression they are the makers).

Imagine a simple scenario

Legal action is begun by a person who is injured by defective products you manufactured.

She will have contacted a solicitor and started a claim for compensation against you for injury and loss.

If you haven't product liability insurance your defence begins:

• You will receive court notification of the claim from the country where the claim was filed, or Trading Standards Officers may as the relevant enforcement authority bring a claim
• You need to find a specialist solicitor and obtain an estimate of fees
• You need to provide the solicitor with information and evidence requested
• The solicitor collects evidence and documents and outlines the strategy options
• You are invoiced by your solicitor for fees and disbursements
• If the claim is contested then you must prepare for the court hearing and pay solicitors, barristers and court fees
• If you lose you pay compensation/damages, medical costs and legal fees
• Should you win you need to recover as much of your legal costs from the claimant - rarely are legal fees recoverable in full

With Product Liability Cover

• The injured party (claimant) begins a claim for compensation
• You pass the claim documents to your insurance broker
• You can carry on with your business
• You provide the insurers and their solicitors with information
• The legal complexities and costs are handled by the insurance company
• If you lose the case in or out of court (you will have legal advice) then the insurer pays the compensation/damages/legal costs
• If the claim is found for you (ie you win the case), then the insurer collects the legal costs from the claimant

As product liability insurance in not compulsory the decision to insure belongs with each business owner or director. Insurance is the pooling or risk and as such the cost of premiums reflects the level of risk associated with your type of product manufacturing, distribution and/or sales operation. Buying insurance will generally allow you to concentrate your resources on what you do best, rather than complex and costly legal disputes.

Examples of companies and businesses which may require product liability insurance:

• Manufactures of Fabricated Metal, Not Machines
• Metal structures & parts
• Builders' carpentry of metal
• Tanks, etc. & metal containers
• Central heating rads & boilers
• Steam generators, not boilers
• Forge press stamp & roll form metal
• Treatment and coat metals
• General mechanical engineering
• Cutlery
• Tools
• Locks and hinges
• Steel drums, similar containers
• Light metal packaging
• Wire products
• Fasteners, screw, chains etc.
• Other fabricated metal products
• Manufactures of Machinery & Equipment
• Engines, not aircraft, etc.
• Pumps & compressors
• Taps and valves
• Bearings, gears, gear etc.
• Furnaces & furnace burners
• Lift & handling equipment
• Non-domestic ventilation
• Other general machinery
• Agricultural tractors
• Agric. & forestry machines
• Portable hand held power tools
• Metalworking tools
• Other machine tools not elsewhere classified
• Machinery for metallurgy
• Machines for mining, quarry etc.
• Food, beverage & tobacco
• Textile, apparel & leather
• Machinery for paper & board
• Other special purpose machine
• Weapons & ammunition
• Electric domestic appliances
• Non-electric domestic appliances
• Manufactures Electrical & Optical Equipment
• Office Machinery & Computers
• Office machinery
• Computers & process equipment
• Electrical Machinery etc.
• Electric motors, generators etc.
• Electricity distribution etc.
• Insulated wire & cable
• Accumulators, batteries etc.
• Lighting equipment & lamps
• Electric equipment, engines etc.
• Other electrical equipment
• Radio, TV & Equipment
• Electronic components
• TV transmitters, telephony etc.
• TV & radio, sound or video etc.
• Medical & Precision Instruments
• medical, orthopaedic etc. equipment
• Instruments for measuring etc.
• Industrial process control equipment
• Optical, photographic etc. equipment
• Watches and clocks
• Manufactures of Transport Equipment
• Motor vehicles
• Motor vehicle bodies etc.
• Motor vehicle & engine parts
• Other Transport Equipment
• Building and repairing of ships
• Build & repair of pleasure & sport boats
• Railway locomotives & stock
• Aircraft & spacecraft
• Motorcycles
• Bicycles
• Invalid carriages
• Other transport equipment
• Manufacturing
• Chairs and seats
• Other office & shop furniture
• Other kitchen furniture
• Other furniture
• Mattresses
• Striking of coins and medals
• Jewellery & related
• Musical instruments
• Sports goods
• Games and toys
• Imitation jewellery
• Brooms and brushes
• Other manufacturing
• Wholesales
• Grain, animal feeds
• Flowers and plants
• Live animals
• Hides, skins and leather
• Unmanufactured tobacco
• Fruit and vegetables
• Meat and meat products
• Dairy products
• Alcohol and other drinks
• Tobacco products
• Sugar, chocolate etc.
• Coffee, tea, cocoa etc.
• Other food inc fish, etc.
• Non-specialised Wholesales food, etc.
• Textiles
• Clothing and footwear
• Electric household goods
• China, wallpaper etc.
• Perfume and cosmetics
• Pharmaceutical goods
• Other household goods
• Fuels & related products
• Metals and metal ores
• Wood, construction etc.
• Hardware, plumbing etc.
• Chemical products
• Other intermediate goods
• Waste and scrap
• Machine tools
• Mining, construction & civil engineering machinery
• Machinery for the textile industry, & of sewing & knitting machines
• Computers, computer peripheral equipment & software
• Other office machinery & equipment
• Other electronic parts & equipment
• Other machinery for use in industry, trade & navigation
• Agricultural machinery & accessories & implements, including tractors
• Other Wholesales
• Retailers
• Retailer Trade, Not Motors; Repairers
• Retailers in non-specialised stores holding an alcohol licence, with food, beverages or tobacco predominating
• Other Retailers non-specialised stores
• Retailers of fruit and vegetables
• Retailers of meat and meat products
• Retailers of fish, crustaceans etc.
• Retailers bread, cakes, confectionery
• Retailers alcoholic & other beverages
• Retail sales of tobacco products
• Other Retailers food etc. specialised
• Dispensing chemists
• Retailers of medical & orthopaedic goods
• Retailers of cosmetic & toilet articles
• Retailers sale of textiles
• Retailers for sale of clothing
• Retailers of footwear & leather goods
• Retailers of furniture household etc.
• Retailers of electric h'hold, etc. goods
• Retailers of hardware, paints & glass
• Retailers of books, newspapers etc.
• Other Retailers specialised stores
• Retailers other secondhand goods
• Retailers sale via mail order houses
• Retailers sale via stalls and markets
• Other non-store Retailers sale
• Repairers boots, shoes, leather goods
• Repairers of electrical household goods
• Repairers of clocks & jewellery
• Repairers not elsewhere classified
• Hotels and Restaurants
• Hotels & Motels with or without restaurant
• Youth hostels and mountain refuges
• Camp sites, including caravan sites
• Other provision of lodgings
• Restaurants
• Bars
• Canteens
• Catering
• Agriculture, Hunting and Forestry
• Producers of cereals & other crops
• Producers of vegetables & nursery products
• Producers of fruit, nuts, beverage & spice crops
• Farmers of cattle, dairy Farmers
• Farm sheep, goats, horses, etc.
• Farmers of swine
• Farmers of poultry
• Other Farmers of animals
• Crops combined with animals, mixed farms
• Agricultural service activities
• Animal husbandry services, not vets
• Hunting and game rearing inc. services
• Forestry & logging
• Forestry & logging related services
• Fishing
• Fishing
• Operation of fish hatcheries & farms
• Mining & Quarrying
• CA Mining & Quarrying Energy Materials
• Mining and agglomeration of hard coal
• Mining and agglomeration of lignite
• Extraction and agglomeration of peat
• Extraction of petroleum & natural gas
• Services to oil and gas extraction
• Mining of uranium & thorium ores
• CB Mine & Quarry, Not Energy Materials
• Mining of iron ores
• Mining of non-ferrous metal ores
• Quarrying of stone for construction
• Quarry of limestone, gypsum & chalk
• Quarrying of slate
• Operation of gravel and sand pits
• Mining of clays and kaolin
• Mine chemical & fertilizer minerals
• Production of salt
• Other mining and quarrying
• Basic Metals & Fabricated Productsh
• Manufactures of basic iron & steel & of Ferro-alloys
• Manufactures of cast iron tubes
• Manufactures of steel tubes
• Cold drawing
• Cold rolling of narrow strips
• Cold forming or folding
• Wire drawing
• Precious metals production
• Aluminium production
• Lead, zinc and tin production
• Copper production
• Other non-ferrous metal production
• Casting of iron
• Casting of steel
• Casting of light metals
• Casting of other non-ferrous metals