What is Product Liability  Insurance?

Product Liability Insurance Hong Kong

Product liability insurance covers claims is linked to product defects. If your company manufactures or sells a product that has a defect and causes injury or property damage, your business could be held liable. If your product causes damage, illness, or hurts someone, they’ll likely seek compensation through the court.

Additionally, customers may also claim the product has the in-built danger that customers should have been made clearly aware of with a label, For example, “Keep product away from kids” or “Beware product is hot”.

The main purpose of the insurance is to cover legal costs and damages for the business due to the claims. Therefore, any company that manufactures, supplies or sells products to the public should have product liability insurance.

What is covered?

Businesses need to protect themselves from the greater risks. Typically, product liability claims arise from design defects, manufacturing defects, warning or use defects, and strict liability.

  • Design defects: claims related to the product issues that were present even before it was made.
  • Manufacturing defects: claims related to problems that occurred while the product was being created or assembled.
  • Warning or use defects: claims that the seller failed to provide detailed labels or warnings on risks and proper use.
  • Strict liability: a claim that is based on injury or damage resulting from the proper use of the product.

What should you know?

The product may be any type of good sold to consumers or businesses, from basic products like food and clothing to complex products like machines and medicines. The injured third party could be anyone who comes into contact with your product, including the buyer, users, or even a bystander.

Product liability will not cover injuries to your employees that may have happened while manufacturing the product. This coverage will also not cover the cost of having to recall your product.

Hence, product companies may also need  Product Recall insurance.


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Common Food Product Claims in the F&B Industry

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