Products liability insurance for what you make and sell
If a product you manufacture, import, distribute or sell injures someone or damages their property, you can be named in the claim, sometimes years after the sale. We place products coverage for manufacturers, wholesalers and retailers and help you see where a standard policy stops.
Everyone in the chain of distribution carries exposure
Under strict liability, a company that sells or distributes a defective product can be held responsible for the harm it causes, even if it took reasonable precautions. That reaches well beyond the factory floor.
Manufacturers
Finished goods, components and parts that go into someone else's product.
Importers
When the foreign maker is hard to reach, claimants often look to the U.S. importer.
Distributors and wholesalers
Goods you warehouse, repackage, relabel or ship under contract.
Retailers and e-commerce
Stores and online sellers named alongside the brand owner.
Food and beverage producers
Breweries, wineries, distilleries, packers and specialty food makers.
Private label brands
Products made by a contract manufacturer and sold under your name.
Three kinds of product defects
Product claims generally rest on one of three theories:
- Manufacturing defect — a specific unit departs from its intended design because of a mistake in production.
- Design defect — the design itself creates an undue risk that a reasonable alternative design could have reduced.
- Warning defect — the instructions or warnings don't adequately tell users about known hazards or how to avoid them.
In Washington, product claims are governed by the Product Liability Act (RCW 7.72). The act lets a seller defend on the ground that harm occurred after the product's "useful safe life," and creates a presumption that the useful safe life has ended when harm occurs more than twelve years after delivery. Claims generally must be brought within three years of when the claimant discovered, or should have discovered, the harm and its cause. Other states apply their own rules, so a product sold nationally can be judged under many of them.
Separately, the Consumer Product Safety Act requires manufacturers, importers, distributors and retailers of consumer products to report to the CPSC within 24 hours of obtaining information that reasonably supports the conclusion that a product contains a defect that could create a substantial risk of injury, or fails to comply with a safety rule. Talk to counsel about reporting questions; we can help you think through the insurance side.
What a products program can include
Forms and exclusions vary by carrier and policy. These are the pieces we typically review.
Products-completed operations
Bodily injury and property damage to others caused by your product after it leaves your hands, under a commercial general liability policy.
Products aggregate limit
Most general liability policies apply a separate aggregate to products claims. It should reflect your sales volume and the severity your products could cause.
Defense costs
Liability policies generally include defense of covered suits. Whether defense is inside or outside the limit depends on the form.
Umbrella / excess
Additional limits above general liability for a single severe claim or several claims in one year.
Vendors endorsement
Extends your coverage to retailers and distributors who resell your product, a common requirement in vendor agreements.
Customer additional insureds
Additional insured status, primary wording and waivers of subrogation required by customer contracts.
Foreign sales
Standard general liability territory limits where suits may be brought. Exporters and companies with overseas buyers may need foreign liability coverage.
Product recall
Costs to notify customers, retrieve, ship and destroy recalled goods. General liability policies typically exclude recall, so this is purchased separately.
Contamination (food and beverage)
Accidental or malicious contamination coverage, often paired with recall for food producers.
What general liability typically does and doesn't pay
Typically responds
- Injury to a user or bystander caused by your product
- Damage your product causes to someone else's property
- Defense of a covered products suit
- Claims alleging manufacturing, design or warning defects
Commonly excluded
- Damage to your own product itself
- Recall or withdrawal of products from the market
- Loss of use of property that isn't physically damaged (impaired property)
- Cost to repair, replace or refund a defective product (a warranty matter)
- Injury you expected or intended
How a product becomes a claim
Three illustrative examples with round, hypothetical figures. Actual outcomes depend on the facts and the policy.
A bracket you make fails in a customer's assembly
A shelving bracket you supply to an assembler cracks under load. A shelving unit collapses in a store and injures a shopper, who sues the store, the assembler and you.
- Injury settlement$275,000
- Legal defense$100,000
- Expert testing$25,000
Illustrative example. Real outcomes depend on the facts and your policy terms.
From product list to placed program
Understand your products
What you make or sell, where it goes, how it is used, your sales by product line and your quality-control and complaint process.
Review your contracts
Vendor, supply and distribution agreements often require specific limits, endorsements and indemnity. We compare them with your policies.
Approach the market
We present your operation to carriers that write your product class, including specialty markets for higher-hazard products.
Maintain the program
Certificates for customers, renewal reviews and a check-in when you add a product line, a new market or an overseas buyer.
Products liability questions
Isn't products liability already part of my general liability policy?
Often, yes. Most commercial general liability policies include products-completed operations coverage with its own aggregate limit. Some policies exclude or restrict it for certain products, so the policy wording and the limit both matter.
I only resell products. Do I still need coverage?
Yes. Retailers and distributors are commonly named in product suits along with the manufacturer. A vendors endorsement on the manufacturer's policy helps, but it has its own exclusions — for example, for products you repackage or modify — so your own coverage still matters.
Does products liability pay for a recall?
Generally no. Standard general liability excludes the cost of recalling or withdrawing products. Product recall and contamination coverage is written separately.
Does it cover defective products I have to replace?
Usually not. Damage to your own product and the cost to repair or replace it are typically excluded. The policy is designed for injury and damage to others.
What limits should I carry?
It depends on your products, your sales and your customers' contract requirements. Large retailers and distributors often set minimums in vendor agreements. We review those requirements along with how severe a loss from your product could be.
Can a claim come years after I sold the product?
Yes. Claims can arise long after the sale, which is one reason to keep records of what you sold, when and to whom, and to keep coverage in place. Washington's product liability act includes a useful-safe-life defense with a twelve-year presumption, but other states apply different rules.
We sell to customers outside the U.S. Are we covered?
Standard general liability covers products made or sold in the U.S. that cause injury abroad only in limited circumstances, generally when the suit is brought in the U.S. Exporters should review foreign liability options with us.
Get a products liability quote
Tell us what you make or sell, your annual sales and who your customers are. We'll review your contracts and come back with options.
Coverage descriptions are general summaries for education. They are not legal, tax or coverage advice, a statement of coverage, an offer or a binder. Scenarios and dollar figures are illustrative examples, not representations about any business. Coverage, limits and eligibility are governed by the terms, conditions and exclusions of the policies issued and are subject to underwriting.