How does product liability insurance protect against wrongful death?

A wrongful death lawsuit occurs when someone dies because of something a business did or failed to do. That could include:

• A product failed to work properly
• Inadequate safety warnings led someone to misuse a product
• An accident you couldn't have foreseen led to a tragedy

Whatever the cause, ultimately, a wrongful death means that product liability could fall on any number of involved parties, including:

• Manufacturers
• Retailers
• Wholesalers and distributors

In short, anyone in the supply chain could potentially be sued. Say a tainted vitamin supplement leads to wrongful death. The maker of the vitamin can be sued, but so can the supplement store, the dietitian who recommended it, and any supplier who may have given the manufacturer tainted vitamins.

A wrongful death lawsuit could have a huge impact on your business in direct and indirect ways:

• You may have substantial legal costs.
• You may face negative publicity.
• You may need to recall the product that led to the wrongful death.

These circumstances and more come with significant costs that small business insurance – namely product liability insurance – can help shield you from.

Say you're a manufacturer that makes bicycle seats. Unbeknownst, your supplier switches materials and you end up using a lower-quality metal that snaps more easily. You're sued in a wrongful death lawsuit when a cyclist dies after a seat post snaps and the cyclist is thrown into traffic.

In a wrongful death lawsuit, there are three types of damage you can be sued for:

Economic damages. If family members of the deceased stand to lose a portion of their financial security, they can sue for that loss. For example, if a parent dies, his children could sue for the loss of their parent's income.

Non-economic damages. In a wrongful death lawsuit, survivors can sue for pain and suffering, emotional distress, and missed future enjoyments. Spouses could sue for grief as well as loss of the life they had planned with their significant other.

Punitive damages. If a court feels the manufacturer (or other party) was especially reckless, it can levy punitive damages, which punish the party at fault by making it pay more.

Your product liability insurance may cover each of these. However, it's worth noting that some product liability policies don't cover punitive / statutory damages. Some policies may also cap the amount of punitive damages they'll cover.

Check with your insurance agent if punitive damages are covered in your policy. Even if they’re not, remember that these damages are typically only imposed in the most reckless of wrongful death cases.

Product liability insurance (included with general liability insurance) may cover wrongful death lawsuits. When a flaw in your product leads to customer injury or wrongful death, product liability insurance can help pay for:

• Attorney's fees
• Economic and non-economic damages
• Punitive damages
• Settlement costs
• Expert witness fees
• Miscellaneous court costs

No matter where you are on the supply chain, product liability insurance can offer key protection for small business owners.

Product liability insurance is typically included with general liability insurance. This policy provides basic lawsuit protection for small businesses over third-party lawsuits concerning:

• Bodily injuries
• Property damage
• Advertising injuries

In addition to wrongful death and product liability issues, small business owners get basic coverage for common business liabilities.

Complete Insureon’s easy online application today to compare small business insurance quotes from top-rated U.S. companies. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.