Product liability insurance is a necessity for businesses that make, distribute, or sell items to the public. What happens when a member of the public suffers personal injury or other damages when a product malfunctions is that they sue the manufacturer, the distributor, and the store that advertised and sold the product to them. A court may release one of more of the entities being sued from responsibility, but insurance is still needed to cover the costs of being found innocent.
Today, juries often award very large claims on product liability cases while sympathizing with the person who has been injured. Juries are made up of common citizens who may feel that the child who cut their finger on a defective toy looks just like their own grandchildren while deciding on how much money to award to the child's family. Product liability insurance covers the unforeseen lawsuit traumas that can occur if a product does not live up to consumer expectations.
Product liability insurance is also needed by businesses that make, distribute, and give away items to the general public.
All health and safety standards must be met on free items in the same manner as those that enter the public through a price-tag. Factory seconds that are unsafe for a consumer to use are not appropriate items to sell at a discount or to give away. When a product is unsafe and damages occur, somebody (manufacturer and distributor) will be recruited to pay for damages in court.The actual risk factor for stores to be involved in a situation that requires a product liability insurance claim are not as great as those of the product manufacturer and distributor. However, businesses and lives are ruined everyday as unhappy consumers file damage claims in court and the businesses involved are not covered by the necessary policy needed to cover the expenses caused by the claims.
In the worst case scenarios, small business owners become personally responsible for damages.When it comes to liability, it is far better to be safe and have the insurance coverage than to be without it. Very tiny flaws that do not show up on normal product safety checks can be enough to cause a manufacturer thousands of dollars in damages that they will be required to pay for. All businesses that make, distribute, sell, or give away products to consumers need to check on their options for a product liability insurance policy with an experienced insurance supplier.
Gemma-Leigh Garner is a freelance copywriter that writes on many different topics for business such as product liability insurance and what business owners should look for in an insurance policy.
You have to be very courageous not to have product liability insurance these days, when people only wait for the opportunity to sue someone and make some money. I know someone who made a living out of it.
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