Product Liability Endorsements 

Protecting Your Small Business with Product Liability Endorsements

Product liability endorsements are a type of insurance specifically designed to protect businesses from the costly consequences of defective product claims. With the prevalence of mass-produced products, the frequency of product defects is increasing—which is why it’s essential for small businesses to have a reliable source of protection in place. 

Product liability endorsements cover damages incurred by third parties as a result of tangible and/or intangible defect-related injuries or illnesses. This could include physical injuries, property damage, mental anguish, and even wrongful death in some cases. In addition to providing compensation for such damages, these endorsements can also help pay for your legal defense costs if you ever find yourself facing a court battle over a customer’s injury or loss due to your product.

When considering potential product liability endorsement options, small business owners should look for providers that offer customizable coverage limits that suit their needs—and those that provide flexible payment plans so they don’t overextend themselves financially. Businesses should also investigate what types of exclusions are attached to any policy before purchasing: for instance, some policies won’t cover damages resulting from an intentional act or an act caused by gross negligence on behalf of the company producing the product. Similarly, some policies may not cover consequential damages suffered by individuals who buy products directly from you (as opposed to buying through another store).

In addition to covering potential damages from customer-related incidents, many comprehensive product liability endorsements will also provide reimbursement for abnormal losses due to recall costs and associated expenses. Recalls are generally expensive and time consuming endeavors; this makes them particularly difficult for small business owners who don’t have large financial reserves set aside in case such an incident were to occur unexpectedly. Therefore having a reliable source of protection can be invaluable in times like these. 

Finally, it’s important that purchasers seek out companies with good reputations when shopping around for possible coverage providers. You’ll want assurance that your provider is financially sound enough to back up its promises; further research into its position among other industry competitors will help determine if this is the case or not.

Overall, purchasing product liability endorsements is no small investment—but it’s an important one nonetheless. For small business owners who handle products as part of their everyday operations, having some sort of reliable source of protection against potentially costly customer claims is critical, both now and into the future as recalls become more common and lawsuits become more prevalent in our society.