Product liability insurance is an additional policy that many businesses purchase along with a general liability insurance policy. Not every business requires an extra policy for product liability. Find out what this policy includes, whether you need it, and how Tabak Insurance can help.
What Is Included With Product Liability Insurance?
A product liability insurance policy is separate from a general liability insurance policy. It covers your business for damages from a claim related to a product that your company manufactures, distributes, or sells.
Someone may make a claim because of injury or harm that was caused by the design of the product or due to a malfunction. They may claim that the product wasn’t labeled correctly to indicate risk, or a warning wasn’t included to alert consumers of the potential for injury.
When you have this type of coverage, it pays for any medical care the claimant needs, up to the policy limits. It also pays for legal costs and any settlement fees paid out to the claimant. Our agents at Tabak Insurance can answer questions about what is included in product liability coverage for your business.
What Isn’t Covered by Product Liability Insurance?
If a product causes harm to an employee, it won’t be covered by product liability insurance. Instead, workers’ compensation will pay for the employee’s medical bills and loss of income.
This policy also doesn’t pay for the costs of care when a customer is injured at your establishment. General liability insurance covers this type of injury for non-employees.
Who Needs Coverage?
Product liability insurance is usually necessary for manufacturing companies, distributors, and stores that sell products. Companies that install or modify products may also need the added protection of this policy.
As a restaurant owner, you may not think you need product liability coverage. Your business is in the service industry rather than manufacturing and selling goods. Since you’re selling food that is made in your kitchen, you do provide a product to your customers. A customer may get sick from their meal, which could lead to a claim against your restaurant.
This policy protects you from issues that arise from expired foods, cross-contamination, or allergic reactions. We can help you determine if you need an additional product liability policy to protect your establishment.
Will a General Liability Insurance Policy Be Enough?
A general liability policy includes some protection for product liability. One aspect of this coverage is for bodily injury, which includes many situations that can occur in a restaurant. Your policy will pay out if a customer slips and falls on a spilled beverage or if they get sick from eating an entree with peanut oil in it when they are allergic to peanuts.
Some restaurants sell specific items that they make on-site. Your establishment may be known for its secret barbeque sauce, which it bottles and sells. You may have a bakery and cafe with customers purchasing extra homemade goods when they eat a meal at your establishment.
A general policy will often be enough insurance for restaurants and bars from product liability. There are situations where you may need extra coverage to protect you from claims. Our agents at Tabak Insurance will sit down with you and discuss your needs. We’ll help you decide if you should purchase an additional policy based on the nature of your business.
How Much Coverage Do You Need?
The amount of coverage you need varies by business. You’ll want to consider carefully your policy limits. Any expenses over the limits in a claim will be your business’ responsibility. Product liability insurance isn’t required by law, which means that it’s up to you to decide your coverage needs.
Your policy will usually list the limits by occurrence and by aggregate. Aggregate means how much is paid out over the life of the policy. You may have a limit of $1 million per occurrence with an aggregate of $3 million.
The cost of coverage is often a major consideration for business owners. Certain products carry a higher risk, such as food items. Your premiums will also be based on previous claims and your sales. We’ll work with you to help you get adequate coverage at a cost your business can afford.
Get a Quote for Commercial Insurance With Tabak
You can contact us for a free quote to help you make an informed decision. Tabak Insurance specializes in restaurant insurance, bar insurance, nightclub insurance, and more. We have been in business helping customers get the coverage they need for over 25 years. Our agents will discuss your business needs and your budget to help you decide how much protection you need and whether a product liability policy makes sense.
Contact Tabak Insurance to get a quote for your restaurant, bar, or nightclub. Our goal is to protect your business from the unexpected.