General liability vs. product liability insurance

Product liability insurance protects your business if a customer claims a product your business makes, sells, or distributes causes them harm or financial loss, such as medical expenses.

This policy would help pay legal fees related to lawsuits filed against your company for product-related incidents.

Product liability insurance coverage is a common policy purchased by retailers, wholesalers, distributors, manufacturers, and importers. A malfunction that occurs at any point in the supply chain can still be blamed on your business, even if you aren't at fault.

Cannabis businesses also often carry product liability insurance to protect against adverse reactions resulting from marijuana use and as a state law requirement.

This policy is sometimes referred to as products-completed operations coverage and protects against product liability claims related to:

• Manufacturing defects
• Labeling issues
• Product defects
• Allergic reactions
• Design defects
• Wrongful deaths that result from product issues
• Strict liability for when a product causes damage but it's not your fault

This policy does not protect against product recalls of defective products. For this, you'd need a separate product recall insurance policy. It also does not generally cover employee injuries, which would need to be covered under a workers' compensation insurance policy.

Insurance companies often include product liability insurance in a standard general liability policy. However, it must sometimes be purchased as an endorsement.

Both policies cover third-party incidents, but general liability covers incidents related to injury, property damage, and advertising injuries, while product liability insurance covers product-specific legal expenses. Which policy you need will likely depend on the type of work you do.

If your business works directly with the public but does not sell, distribute, or make products, you should obtain a general insurance liability policy but don't necessarily need product liability coverage.

If your business makes products but does not sell directly to the public, you may not necessarily need general liability, but it's still a good idea in case you have vendors or other non-employees on your business property at any point.

Most commercial general liability policies contain product liability insurance, so having general liability coverage will often provide the coverage of both policies. Check with your insurance agent to understand the full scope of your insurance policies.

Many commercial general liability insurance policies already include a product liability insurance policy.

You can check with your insurance company to ensure you're properly protected from all of your industry risks.

Obtaining insurance coverage is quick and easy with Insureon. Fill out our online application and we'll provide you with free liability insurance quotes from the U.S.'s top providers.

If you have questions, you can contact a licensed insurance agent who can walk you through your options.

Our agents can also help you explore other types of insurance, such as a business owner's policy or professional liability, in order to operate your business with peace of mind knowing you're protected from common risks and legal liabilities.