Public Liability and Product liability, public and product liability insurance, product and public liability insurance

Product liability and public liability are insurances that can be bought together as a bundle under commercial general liability insurance. They are both top insurances needed to protect the business’s liability when things don’t go as planned.

The right liability insurance is crucial for a business as it can save a company from substantial financial loss and reputation damage. In addition, both public and product liability cover third-party injuries and property damage due to business mistakes/activity.

Understanding the different insurance and risks is important for every business. As each insurance covers distinct risks. This article will explain the purpose of public liability and product insurance and the clear differences between them.

What is Public Liability?

Public Liability Insurance

Every business has public liability risks on your premises or where you meet your clients. The company is responsible for any third-party injuries or property damage on the premises or due to business activities.

Thus, businesses inviting customers and clients to their sites have a higher chance of a public liability claim. These businesses include restaurants, shops and even gyms. A public liability claim can be expensive and ruin the business’s reputation.

Therefore, businesses should purchase public liability insurance before it’s too late.

Public Liability insurance protects the insured if a third party sues the business, alleging that business activities or negligence caused them some bodily injury, death or property damage.

Public Liability Insurance Cover Includes:

The insurance will cover the cost of:

  • Bodily Injury: Public liability insurance will cover medical and compensation costs when someone is injured.
  • Property Damage: The insurance will cover damage to a third party’s property-replacing or repair costs.
  • Legal Expenses: Additional cover is the cost of hiring and paying a lawyer to defend your business in a lawsuit. At times, the company is not at fault, and it may be a false claim that needs to be fought.

Public Liability Examples

For example, A customer enters your shop and slips and falls due to wet floors. The customer will have the right to sue the business for injuries due to their negligence. The company will be liable to pay for the injury and compensation depending on how severe the injury is.

Another example is if, during the meeting (at any location), your employee spills his coffee all over the client’s laptop. The client can sue the business for property damage and loss of essential files. The company will be liable to pay for repair or replacement of the property and compensation- if experts can’t recover work.

What is Product Liability?

Design Defect, what is products liability coverage, product liability insurance definition

The product industry is one of the largest industries, including millions of products from food, medicine, clothes, technology, and more. Each business involved in the industry can be a victim of the many product liability risks.

Additionally, all product businesses are responsible for the product’s outcome toward their customers. Results should be good, but sometimes, they can be bad or even dangerous. A product can harm a customer in many ways, no matter what the product is. Third-party injury or property damage due to a product defect can result in an expensive lawsuit against the business. 

Hence, businesses buy product liability insurance. Product liability insurance provides cover against bodily injury or property damage claims against a product a company- sells, makes or distributes.

Product Liability Insurance Cover Includes:

The insurance will cover most costs related to claims that result from:

  • Design Defects: claims related to product issues due to poor design.
  • Manufacturing Defects: claims related to problems while creating or assembling the product. This can include toxic chemicals used or wrong materials.
  • Failure to Warn Claims: claims that the seller failed to provide detailed labels or warnings on risks and proper use

Product Liability Examples

A famous example of a product claim (manufacturing defect) is the Samsung phone battery that exploded, causing injuries and property damage worldwide—resulting in Samsung paying millions to resolve cases.

Another example is a poorly designed coffee machine that sprays hot liquid on users, causing burn injuries. An injured third party can sue the coffee machine business for the design defect. The company will have to pay for medical costs and compensation.

Does A Business Need Both Insurances?

Companies must understand their risks and the different insurances they can purchase to protect their specific risks. Businesses do not intend to harm their customers and clients; unfortunately, accidents happen. Combining both insurances will protect your business from almost all third-party risks

Additionally, having both insurances will help a business save a significant amount financially and help defend its reputation. No business should suffer from mistakes that are out of their control, and these insurance companies understand that. Therefore, insurance reimbursement satisfies the company and the third party affected by providing the best coverage in challenging situations.

Having the right combination of insurance also provides peace of mind even before an incident occurs. Companies do not have to constantly worry about risks and can stress less knowing there are policies in place if things go wrong.

If your company provides products and deals with customers/clients directly, you will need public and product liability insurance.



To Learn More about liability insurance and get the best protection for your business, contact Red Asia Insurance.