Product Liability Insurance

Why is Products Liability Insurance Required?

Product liability insurance is not compulsory by law. It isw designed to meet your legal liability to pay damages for death, injury or damage caused by defects in products you design, manufacture or supply. It should cover solicitors' fees, court expenses, damages and claimant's costs.

The Consumer Protection Act 1987 transposes the Product Liability Directive (85/374/EEC and 1999/34/EC*) into UK law. This legislation imposes strict liability on producers for harm caused by defective products.

Insurance policies are also available to protect you against the cost of having to recall a product.

For events occurring on or after 29 January 2007, the NHS can also lodge a claim to cover hospital treatment and ambulance costs. This alone could run to thousands of pounds.

Product liability insurance is often sold as a package with public liability insurance. The standard duration of the policy is 12 months.

I Have No Product Liability Insurance!

What happens if I don't have product liability cover?

If someone buys a faulty product from you and it malfunctions, causing serious injury, then they may try to claim from you first, even if you didn't manufacture it.

Without product liability insurance cover, you will be forced to expend time and energy on defending your case, plus you will have to meet the cost of defending your case in court out of your own pocket.

Having product liability insurance cover will give you peace of mind, knowing that any potential claims will be defended on your behalf by your insurer.

Just remember that this type of cover is no protection against inferior workmanship. If the product or service you supply is substandard, you will not be eligible for any cover whatsoever.