Products liability insurance – who needs this cover?
We often get asked, when people are looking for a business insurance quote, whether they need products liability insurance.
The answer to the question, which does not help, is yes, probably. There is no legal requirement, under UK law, for a business or individual to have products liability.
We first of all need to understand what this cover is. Simply put, if you manufacture or supply (with the manufacture being undertaken by someone else) a product, which causes injury, illness, disease or damage to another person(s) or property, you can be held legally liable. Now, as you can be held legally liable you would think it follows that you should have the cover, but this is not the case.
So, now we understand that 80% of UK businesses (who supply or manufacture products) need this cover, what happens if you do not have it? If I go to a supermarket and buy a tin of beans, in UK law I have a financial relationship with the supermarket. Therefore, if the product poisons me, I will claim against them. The law is not concerned with who made the product, I claim against the party I bought it from.
The supermarkets insurers would then pay out to me, with their insurers deciding whether to subrogate (or claim) against the business insurance insurers of the ultimate product manufacturers. This is where it gets interesting, every link in the chain from product manufacture to sale, which can be three, four, five or more companies, needs to have insurance cover.
The potential for a claim is low, but you really should have the cover in place. You don’t need to have the cover, no-one is going to quote UK law to you to prove you need the cover. But, if you want to get adequate protection for your business you really should give us a call to get your own product liability insurance quote.
Similar Posts:
- Slips, trips, falls and injury in a company car park.
- Product liability insurance – exports to North America
- High risk liability insurance
- Falling icicles – property owners liability insurance
- Public liability insurance – £10,000,000 limit of indemnity
