Your Small Business Might Need Product Liability Insurance

Your Small Business Might Need Product Liability Insurance

Product liability insurance is needed by all businesses that refurbish products, manufacture products, sell products, or distribute products for sale. In 1963, there was a court case in California that changed our product liability laws from the consumer taking some responsibility for their actions with products, to ones that hold business totally liable for damages to a consumer or their property if a product performs badly.

Products can perform badly for three reasons:

Bad performance can happen if there was a problem at the manufacturing facility that resulted in a flawed product.

Bad performance can happen if the product was thought to be safe and a consumer found an unsafe aspect about the product that was not noticed before.

Products perform badly when a consumer is not told in writing about all possible hazards that they are facing if they choose to use the product.

Example of how product liability insurance is needed by an unsuspecting business:

Refurbish products must meet all recognized health and safety standards, or the business owner selling them along with the service that did the refurbishing can be sued if the products perform poorly.

Product liability insurance is desperately needed by antique dealers, eBay online used item stores, businesses that refurbish used items for resale, and many other large and small businesses that chance selling used items to consumers.

Antique dealers and used item sellers are often handling products that were previously found to be unsafe for consumers to be using. The age of a product does not release anybody from following our current laws regarding product safety. If any product was manufactured with a flaw, made in an unsafe design, or does not have written information about all possible safety hazards, product liability insurance might be needed.

If a consumer purchases a ladder from their local hardware store, and the consumer falls off of the uppermost step and breaks a bone, if there is no warning label on the ladder because a bored child picked it off in the store, the person with the broken bone will sue the manufacturer, the distributor, and the store that sold them the ladder.

While it might seem unfair, all three can be found to be at fault by a judge and ordered to pay restitution.

Product liability insurance is needed by every business that handles products going to consumers in any manner today. There are people out there promoting campaigns to change our current product liability laws into something more realistic, but until that happens, all businesses are in the line-of-fire from consumers that have been hurt honestly while using a product and those who cheat a little for damages money.

Gemma-Leigh Garner is a freelance copywriter that writes on many different business & insurance topics such as product liability insurance and helping manufacturers & retailers deal with product liability protection and other insurance needs.

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