What this coverage is
Product liability insurance helps respond when a product is alleged to have caused harm because of a defect, a manufacturing flaw, or inadequate warnings or instructions. Liability can extend across the supply chain, from manufacturers to distributors and retailers.
For many businesses, product liability is included within the products-completed operations portion of a general liability policy, while higher-risk operations may carry dedicated or higher limits.
Who commonly needs it
Businesses that manufacture, import, distribute, or sell physical products commonly need product liability protection, since responsibility can attach at multiple points in the chain.
Where this coverage commonly fits
Operational — coverage tied to how a business physically operates day to day — its property, vehicles, and equipment. Product liability commonly fits businesses that make, distribute, or sell physical products.
- Manufacturers and fabricators
- Wholesalers and distributors
- Food and beverage producers
- Retailers selling physical goods
- Agricultural producers and processors
What it may cover
- Bodily injury caused by a covered product
- Property damage caused by a covered product
- Defects in design, manufacturing, or labeling
- Failure to provide adequate warnings or instructions
- Legal defense costs for covered product claims, subject to terms
What it typically excludes
- Product recall and withdrawal costs, which often require separate coverage
- Damage to your own product
- Known defects or intentional misconduct
- Breach of warranty beyond covered injury or damage
- Liability above selected limits
Hypothetical claim scenarios
These illustrative examples are for general understanding only. Coverage depends on the specific policy terms, conditions, and exclusions.
Defective product injury
A consumer is injured by an alleged product defect. Product liability may help respond to the resulting claim and defense costs, subject to policy terms.
Contaminated food product
A food producer faces claims that a product caused illness. The policy may help address covered bodily-injury claims, subject to terms.
Faulty component damage
A component allegedly fails and damages a customer's property. Coverage may help with the third-party property-damage claim, subject to limits.
What commonly affects cost
- Type of products and their risk profile
- Annual sales and distribution footprint
- Quality-control and testing practices
- Claims and recall history
- Selected limits and deductibles
How much does it cost?
On average, many businesses pay roughly $500–$1,500 per year, often bundled with general liability for product liability insurance. That figure is a general national average only — your actual premium is set during underwriting.
- Product Liability Insurance$500–$1,500 per year, often bundled with general liability
These are general national averages shown for comparison only — not a quote. Actual premiums vary widely with underwriting and depend on the factors above and the specifics of your business, including size, revenue, location, claims history, and the limits you choose. See how we estimate costs.
Industries where this coverage is common
Coverage needs vary business to business — most companies consider this protection regardless of industry. These are simply the industries where we see it most often.
See how this coverage works in your industry
A few examples from the business types we cover — this coverage applies well beyond the industries shown here.
Don't see your business type? Browse all industries we cover — coverage recommendations are tailored to every operation.
Frequently asked questions
Is product liability part of general liability?
For many businesses, product liability is included within the products-completed operations portion of a general liability policy. Higher-risk operations may carry dedicated or higher limits.
Do retailers need product liability if they only sell goods?
Yes. Liability can attach to sellers and distributors, not just manufacturers, so retailers commonly carry product liability protection.
Does it cover product recalls?
Recall and withdrawal costs are commonly excluded and often require separate product recall coverage. Product liability focuses on injury and damage claims.
What kinds of defects are covered?
Covered allegations commonly include design defects, manufacturing flaws, and inadequate warnings or instructions that lead to injury or damage.
Can suppliers require proof of product liability?
Yes. Retailers and distribution partners frequently require suppliers to carry product liability coverage and to be named on certificates of insurance.
How do I get a quote for this coverage?
Call The Southern Agency at 1-800-777-1872 or request a quote online, and an advisor can help tailor coverage to your business.
Related coverages
- Professional Liability Insurance Protection against claims of professional error, omission, or negligent service.
- Cyber Liability Insurance Response and liability coverage for data breaches and cyber incidents.
- Umbrella / Excess Liability Insurance Additional liability limits that sit above underlying policies.
- Employment Practices Liability Insurance Defense and liability coverage for employment-related claims such as discrimination or wrongful termination.