If you are involved in producing a product then you should consider having insurance to cover any serious defects that might emerge. We live in a society where people are able to pursue legal action fairly easily and sometimes without any cost to themselves. Failure to take this precaution could see you on the receiving end of some very unwelcome lawsuits. Product liability insurance protects companies from customers filing claims stating that they have been harmed by one of your products.

This is a fairly specialist area of the insurance market, and as a result it can be expensive. However, the costs of defending your company in court will almost certainly be greater. And should a case go against you the damages could run into millions. In most industries product liability insurance is not compulsory, however certain government and specific contracts may insist you have it.

A good policy should guard you against:

 - Claims made regarding safety

 - Claims made regarding manufacturing quality or quality of service

 - Spoilage

 - Indemnity costs – medical bills etc.

Product liability, like most insurance, is designed to cover you against something untoward. If you simply make an inferior product or supply bad services then you are not going to be able to claim.

It is also crucial to realise that simply having product liability insurance does not relieve you from the responsibility of taking statutory due care in your business operations. It is not a license to take your eye off the ball. Your insurer will also require you to observe certain standards (use of trained staff, proper equipment etc).

Precisely how much you should cover your company for is up to you. Naturally you will be looking at large sums, and it is unlikely that you will find product liability part of another policy unless you have already specified it. To find a provider you would be best advised to use a broker or go to your local business association.