Specialty Product Liability Insurance

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The Specialty Product Liability Insurance Guide

Product Liability Insurance

Product Liability Insurance. This guide provides information on excess, surplus and specialty lines small business insurance policies and risks.

Here you can find basic descriptions of the specific industry risks or specialty coverage types available for Product Liability Insurance.

For certain types of small businesses, particularly new ones - it is often very hard to know what types of commercial insurance is needed, what the risks are that should be covered - and where to find coverage.

We wanted to provide reference for specialty commercial insurance to help our readers get a better understanding of Product Liability Insurance policies they might need to do business.

Learn about Specialty Product Liability Insurance to better understand common risks, exposures and the types of commercial insurance coverage available to protect your small business and it's operations.

Product Liability Insurance Types

Click on the links below to learn more about Specialty Product Liability Insurance types and coverages:

What Is Aircraft Products Liability Insurance?

Products liability coverage for aircraft manufacturers and aircraft products dealers is difficult to place. Loss potential is significant because of the catastrophic consequences when a product used in an aircraft fails in flight. Fixed based operators and others who repair and replace aircraft parts may also need this coverage.

What Is Medical Technology & Life Science Manufacturers and Distributors Products & Completed Operations Liability Insurance?

Companies that manufacture, test, distribute, and sell medical, biological, pharmaceutical, and other products approved by the Food and Drug Administration (FDA) or other regulatory bodies around the world are vulnerable to a variety of product liability risks. These risks are unique to their industries and require very specialized insurance coverage. These companies also recruit human test participants for trial across the globe and coverage is difficult to understand and place.

What Is Product Contamination Insurance?

Product contamination coverage applies when an individual has contaminated a product or has threatened to do so. It covers related costs, such as necessary destruction of inventory, lost profits, business interruption, product recall and product rehabilitation. When a product contamination case arises, crisis management and loss prevention firms can be called in to help the insured reduce chances that it will continue to be a target and minimize the damage that might arise. Coverage does not apply to third-party liability or extortion payments. Premiums are based on the size of the business and an assessment of the exposures.

What Is Product Warranty Inefficacy Coverage?

This is a highly specialized performance surety or guaranty insurance that was originally designed for investors or manufacturers of alternative energy sources. It provides financial protection if a system does not perform as engineered or designed. This type of insurance encourages investment and development of both alternative energy sources and other types of manufactured products.

What Is Product Warranty Insurance?

Warranties often specify a product's expected life and offer to replace, repair, or reimburse the consumer for defective parts or workmanship. The business that makes the product or provides the service can then use the written warranty to promote customer acceptance and increase sales. The warranties can be insured as an alternative to covering future warranty claims. Customers are often more willing to purchase a product or service that has a warranty backed by insurance. Common examples of products or services that have written warranties include household appliances, solar heating equipment, auto rust-proofing services, auto accessories, auto muffler and transmission services, burglar alarms, and camera equipment. The insured's liability for the warranty can be covered through guaranty bonds, contractual liability coverage, or commercial inland marine coverage forms.

What Is Products Liability - Hazardous Or New Products Insurance?

Certain types of manufactured products have particularly hazardous products liability exposures. Drugs, cosmetics, chemicals, and ladders are some examples. Many domestic insurance companies write insurance on these classes of business on only a very limited basis. In addition, very few standard markets are interested in insuring certain types of new products, particularly drugs. Specialized markets are available to write this coverage that involves providing a complete description of the product along with complete chemical and/or engineering reports. Businesses engaged in manufacturing and installing solar-heating equipment and burglar and fire alarm equipment have a very real need for this coverage.

What Is Products Recall Expense Insurance?

This is a form of extra expense coverage instead of legal liability coverage. Coverage applies to measurable expenses involved in withdrawing the product, including cost of communications, shipping charges, radio and television announcements, newspaper advertisements, costs of hiring additional personnel, paying overtime to regular employees, and costs to destroy the product, if necessary. This coverage applies to only those expenses directly related to withdrawing a suspected defective product from the market. In most cases, coverage is written subject to both deductibles and coinsurance.

What Are Risk Retention Groups And Purchase Group Programs?

The authority to establish risk retention groups and purchasing groups stems from federal legislation passed in 1986 known as the Liability Risk Retention Act. It permits groups to form risk retention programs or purchasing groups for all types of liability insurance. The group must be chartered in one state, its state of domicile, but is authorized to operate in all states and the District of Columbia. Risk retention groups are exempt from most state regulations and do not contribute to state guaranty funds. A number of captive insurers, surplus lines insurers and brokers, and risk management consultants participate in operating risk retention groups.

Product Liability Insurance - The Bottom Line

We hope that the Product Liability Insurance helps you to better understand the some of the specialty small business commercial insurance policies available for your business. To find out what types of coverage your unique business needs, speak to a professional commercial broker with experience in insuring businesses like yours.

Specialty Small Business Insurance Guide By Industry, Risk Or Policy Type

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).

Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

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