Owning a business can be a lucrative venture, but there are many risks involved. This sentiment rings especially true for companies that sell products to the public or other businesses, such as vitamins or furniture. To ensure you're properly protected against the financial burdens of lawsuits related to the goods you produce, it's vital that you have product liability coverage in place. Take a closer look at some of the lesser known facts regarding this style of insurance, below.
3 Facts You May Not Know About Product Liability Coverage
1. Most Plans Provide Professional Liability Protection
In most cases, the protection provided by product liability extends to the design. As long as the good was designed in-house, most businesses can avoid purchasing a separate professional liability plan or adding an endorsement to an existing policy. However, there are exceptions, so check with your agent to verify your particular needs.
2. The 'Product' Doesn't Have to Be Tangible
The term 'product' brings to mind a physical object, but it also extends to digital goods. In the modern world, more and more products are virtual, existing as code, like software, but they can still cause damage. For instance, if you sell a digital download of automation software, and it damages the user's operating system, you could face a lawsuit. As a rule of thumb, if you sell any goods, you should purchase product liability coverage.
3. Imported Products Can Result in Higher Coverage
There are certain regions of the world where the manufacturing and design regulations are not effectively enforced, resulting in an increased risk for malfunctions. As such, insurance companies have become more selective with the items they're willing to insure. Some providers will deny coverage to companies that sell products imported from specific countries, while others charge higher premiums. If you purchase from businesses in high-risk zones, you may want to consider working with a local manufacturer instead.
There's no reward without risk, but you can keep your business protected with the right insurance policy. Find the perfect coverage for your company's needs today by turning to Jackson Dieken & Associates in Westlake, OH. For nearly 30 years, the insurance agency has provided businesses throughout the Greater Cleveland area with personalized, professional assistance. From product liability to umbrella insurance, you can request your quote today online or by calling (440) 250-6873.