Is Your Business Safe Or Insured With Product Liability Insurance?
Are you involved in the business of producing the products available to the consumers? Then it is sure that you will be held liable for the injures or side effects caused by those products to the consumers.
Like, the craftsman who designs a jewelry is liable for the metals that cause allergies to the skin; so, in such situations, product liability insurance guards you against any negligence.
Product liability insurance is a perfect solution for the manufacturers that protects them against claims imposed by the consumers. As per the consumer protection act 1987, whosoever are involved in the chain of making products available to the public would be liable for the punishments, if the products fail to meet the actual needs of consumers or result in illness to a third party.
This policy is helpful in three circumstances basically, when a company faces product claims:
Manufacturing or production fault
This situation occurs when an unsafe defect is noticed in the end product. Most of the Chinese products have the presence of dangerous chemicals in their product for which they may be sued by the consumers.
Defect in designs
A claim may be imposed by the consumer when a defect is noticed in the designing process. The issue may be cleared by taking an example of Pinto car’s cases against Ford in 1970’s.
Defective warning and instructions
This claim is imposed by the consumers when the labeling of the product has some misprints or has insufficient warnings for the consumer to understand the risk.
The losses in all such cases involve medical costs, compensatory damages, economic damages and in most of the cases attorney’s fees and punitive damages.
In the chain of retailer, seller, manufacturer and the other parties, the retailers mostly fail to secure this coverage plan and the reason is that they are not involved in the production process, so this policy may not be really essential for them.
If you are still wondering how this policy is going to help you, here’s the answer. Product liability insurance policy protects the producers when they get sued. By obtaining this sort of coverage, the makers of the product need not to bother about any financial loss which may be associated with a law suit.
The insurance policy compensates the victims for their injuries and plays both in favor of customers and the company. If your company is involved in any such activity, then your company needs this coverage plan.
If you consider that obtaining such plans is going to be tough, catch the services of insurance firms or the brokers and protect your business from bankruptcy or any other such situations.