If your business manufactures, distributes, sells, or imports products, you face product liability exposure. A single product liability claim can be financially devastating without the right insurance in place. Here’s what product liability coverage does and why it matters across industries.
What Product Liability Insurance Covers
Product liability insurance covers claims alleging that a product your business made, distributed, or sold caused bodily injury or property damage. It covers legal defense costs, settlements, and judgments. Product liability is typically included within a general liability policy, but the limits may not be adequate for businesses in high-risk product categories. Standalone product liability policies are available when higher limits or broader coverage terms are needed.
Industries with the Highest Product Liability Exposure
Any industry that puts products directly in the hands of consumers faces product liability risk. Cannabis and hemp companies face particularly elevated exposure because of the psychoactive nature of their products, labeling requirements, and the absence of FDA regulation in most categories. Peptide manufacturers and distributors, natural supplement companies, food and beverage producers, and specialty chemical companies all face significant product liability exposure.
Product Recall Coverage
Product recall insurance, often purchased separately from general liability, covers the cost of recalling a defective or contaminated product from the market. Recall costs — including notification, transportation, disposal, and replacement — can be massive. Businesses in food, beverage, supplement, and cannabis categories should strongly consider standalone recall coverage. A product recall without insurance coverage can be a company-ending event.
Contract Requirements and Additional Insureds
Many retailers, distributors, and commercial partners require suppliers and vendors to carry product liability insurance with specific minimum limits — often $1 million per occurrence or more. They may also require that they be named as an additional insured on your policy. Working with a knowledgeable broker ensures that your policy meets contractual requirements before you sign agreements that could expose you to uncovered liability.
Bozzuto Group’s Specialty Product Liability Expertise
Product liability for cannabis, hemp, peptides, and natural products requires specialized underwriting expertise that most standard brokers lack. Bozzuto Group works with the specialty markets that understand your products and the risks they present. Contact us to discuss a product liability program designed for your business.