How does Product Liability Insurance Works for a Small Business?

When you are looking at liability insurance for small business it is very important to think about product liability insurance if your business is one involved with a manufactured product. This type of small business liability insurance will cover your business if an item that your business manufactures or develops is cause of some sort of accident or injury or even death for somebody. Even the smallest of products can pose a threat to people.

If a product causes damages or injuries, the consumer can bring a claim against the supplier. It does not really matter whether he is the manufacturer or not. Product liability insurance is for business which manufactures or sells products. Product liability insurance secures the business from product related claims. Small business owners can benefit from this insurance especially because there is always a chance that something can go wrong somewhere in products that you may manufacture.

The product liability insurance helps small business to get protected from lawsuits, which are filled by the customer when they get injury or death by using your business product. This insurance works for small business in many ways,

It provides medical or death benefits for the customer, if the customer suffers from injury or death due tot he usage of defective product. With the help of product liability insurance your business can be saved from lawsuits which is filed by the injured customer.

For example: If you have a small business that produces some sort of snacks and food items. Due to the negligence of your employee or quality control department few defective products come into the market. A customer gets injured or may die by eating that defective product. In these cases, the customer can claim against your business. In such situations, your business needs to pay some amount of money to the injured or died person in the form of hospital or medical expenses or compensation to family. Therefore, if you have product liability insurance then your insurance firm pays all the expenses to the injured person to recover his health and if death occurs, it provides death benefits to the dependents of that person.

It also provides the cost of recall for your company’s defective products. If your business manufactures electronic items or automobiles and if some items are identified as defective or use of the product may cause some harm to the customer, then you have to recall your products to rectify the mistake. In such cases, your company needs to bear the recall cost. If you have the product liability insurance then the insurance company pays for the recall costs.

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