What is Products Liability?

Product liability refers to a manufacturer or seller being held liable for placing a defective product into the hands of a consumer. Responsibility for a product defect that causes injury lies with all sellers of the product who are in the distribution chain. In general terms, the law requires that a product meet the ordinary expectations of the consumer. When a product has an unexpected defect or danger, the product cannot be said to meet the ordinary expectations of the consumer.

What is the importance?

Product Liability insurance protects the business that manufactures, distributes, supplies, retails, or makes products readily available to the public.

What is Products Liability Law?

Product liability law provides legal recourse for victims of defective products. Individuals who are injured by an item that was improperly designed, manufactured, or packaged can seek compensation under several different theories, all of which fall under this area of law. Most claimants in product liability cases will attempt to recover under the theory of strict liability. Only where the elements of strict liability are not met, will claimants resort to the alternative theories of negligence, breach of warranty, or fraudulent misrepresentation.


Applied Resource Insurance Solutions specializes in finding innovative solutions for difficult or niche-driven risks.

Our Products Liability insurance specialists provide tailored policies using their knowledge and expertise to meet your company’s unique risks.

Why a Single Product Liability Lawsuit Can Bankrupt Your Whole Business

Turn on your television at any given moment and you will find a product recall of some sort. In 2014 alone, 64 million vehicles were recalled, and just under 17 millio0n children’s products. Tack on another 21 million pounds of food recalls and you have a receipt for millions of dollars in product liability lawsuits. For 2014, that number was $953 million. So, where does your business stand if you are ever sued?

Product Liability Insurance: Your Best Defense Against Big Lawsuits

The sad reality is this: It only has to happen once for most businesses. A product you sell can cause injury and you will be sued, even if you didn’t manufacture it directly. All an individual has to do is prove that you knew a problem existed with the product, yet did nothing to fix it. This is called negligence, and it’s one example of a liability claim. To deal with these situations appropriately, you should obtain product liability coverage.

How Does It Protect Your Business?

Business product liability insurance protects on three fronts.

Three Potential Product Claims:


Manufacturing or Production Flaw

If the way you produce a product results in creating something unsafe, you can be held responsible.


Defects in Design

If the way your product is designed causes harm to a consumer, you could be held responsible for damage or injury.


Defective Warnings or Instructions

If your product is labeled improperly, i.e., absence of warnings or contains unclear instructions, and the use of the product results in injury, you could be held responsible.

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