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Product Liability Insurance for Your Business

The purpose of product liability insurance will work to protect a business from any claims related to the manufacture or the selling of medicines, food, products or other goods, to the consumers. It covers the sellers or the manufacturer’s liability for any losses or any type of injury that occurs to a buyer, a user or a bystander that is the result of a malfunction or defect of the product, and in some cases, a failure to war or defective design. In order to understand the need for this type of coverage it is important to understand the possibility of liability. There are typically three types of claims, related to products, that a Santa Clarita business insurance holder might encounter.

Production or Manufacturing Flaws
This is a claim that is a part of the manufacturer’s production process caused an unsafe defect in the product. An example of this type of claim would be the presence of dangerous chemicals in a product.

Design Defect
This includes a claim that the actual design of the product is considered inherently unsafe. A classic example of this type of products liability claim would be the Ford Pinto car cases that took place back in the 1970s.

Defective Instructions or Warnings

This includes the claim that a product has not been labeled properly or it did not have sufficient warnings to ensure that a consumer fully understood the entire risk. An example of this case would be the infamous McDonalds “coffee case.”

The damages that are typically awarded in these types of cases include the medical costs, any economic or compensatory damages and in some cases punitive damages and attorney’s fees. The fact is that product liability cases, without the proper insurance coverage, can put a business out of business – end of story.

Too often a re-seller, or a gray market commercial seller and various retailers do not ensure they secure this type of coverage. Their logic is that since they are not actually manufacturing anything, they do not need to purchase the coverage. However, the fact is that the manufacturer is not the only responsible party when it comes to product liability. Wholesalers and retailers can also be brought into a specific lawsuit for any type of alleged negligence that occurs to the consumer. The stream of commerce is the model of liability that is followed. This means that if you have a company that participated in placing a certain product in the stream of commerce, it may be held liable for any damages to the end user.

The fact is that having products liability insurance is essential if your business plays a role of getting a product, food, or other item to a consumer. If you would like more information about products liability insurance, contact JSG Insurance in Santa Clarita today. We can help get you covered at a great price so that you can rest easy knowing that your business is ready to handle any potential issues. Visit our website or call us today for more information, including a free quote!

JSG Insurance Services
27433 Tourney Rd, Suite 280
Santa Clarita, CA 91355
Posted 6:00 AM

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