So what's the difference between product liability insurance vs general liability? Bobtail insurance isn't the same thing as non-trucking liability and all owner operators should be aware of the differences.
Product Liability Insurance vs General Liability
Most company owners know that they need insurance to protect their business should something go wrong. Insurance can provide funds when you need them most after disasters, throughout legal disputes, and to provide compensation after theft or property damage. Without insurance, you need to pay for these costs out of pocket, which can quickly drain your profits. In fact, some companies go bankrupt after experiencing these types of events with inadequate coverage.
While company owners understand the importance of insurance, not many know that there are multiple types of insurance that apply to businesses. Two of the most valuable types are general liability insurance and product liability insurance. Depending on the type of business you run, both types may be critically important. Learn more about product liability insurance vs general liability insurance to find out how best to meet your commercial insurance needs.
General Liability Insurance
General liability insurance is something that all companies, regardless of industry, product, or purpose, should have. It covers you from numerous legal risks, including:
- Injuries sustained on the premises
- Damage to your premise or caused by your company to someone else's property
- Marketing errors, such as copyright infringement
These types of risks are ones that all businesses face. If you find yourself faced with a claim or potential claim, this type of insurance is invaluable. It covers all legal expenses, including court costs, fees for legal counsel, and any settlement or judgement reached. Even if you do not have a physical premises or operate remotely, you should still invest in general liability insurance policy.
Commercial general liability is often included in business insurance packages because of its importance across industries. If your insurance agent does not mention it, raise the suggestion yourself. Ideally, you should invest in insurance before opening your doors. This guarantees you are protected even if something goes wrong on the very first day.
Product Liability Insurance
Product liability insurance vs general liability insurance. While general liability covers claims relating to operations, premises, completed operations and your products, product liability insurance applies when there are claims made relating to the use of your products.
Company owners rely on this type of insurance in cases where damage to a person or property happens as a result of your product. It is important to know that products liability does not provide coverage for claims of defective or faulty design alone - unless that fault or defect causes bodily injury or property damage.
Courts can rule that the company is liable if a third party is injured or damages property if it is found that the product fault lies with the business - not misuse by the consumer.
Product liability insurance covers numerous claims relating to the items you sell, including:
- Those that cause bodily harm or injury to the consumer
- Those that cause damage to property
- Any illness as a result of ingesting food or beverages made or sold by your company
There are many reasons why a product may cause the damages mentioned above. The issue causing the damage can happen at any stage in the products development or lifespan. In some cases, a design flaw can cause serious issues with the product. Manufacturing defects are issues with the product that develop as a result of the way it was made, as opposed to the way it was designed. Finally, marketing defects happen when the product is not marketed properly, including incorrect labelling or incomplete directions.
Which One Do You Need?
Many businesses should invest in both product liability and general liability. General liability is a must-have for any company, regardless of the type of business they conduct. Product liability insurance is essential for any business that manufactures. white or private labels or imports products.
Product liability insurance is not just essential for companies that do business with the public. Business-to-business operations also require this type of insurance. Damages can happen to other corporations as easily as they can to private citizens. In fact, corporations are much more likely to sue than the average person, simply because they have more resources at their disposal.
Product Liability Insurance vs General Liability - The Bottom Line
We hope this article on product liability insurance vs general liability was informative. Companies of all sizes and types need to ensure they have proper commercial insurance coverage in place, before anything goes wrong. General liability provides coverage for your operations, premises, completed operations (such as construction work) and your products.
Replacing products or paying lawsuits out-of-pocket can quickly put you and your company out of business or into significant debt. Understanding the difference between product liability insurance and general liability insurance guarantees that you find the best policy for you. Obtain a more personalized perspective on your insurance needs by contacting your insurance specialist today.
Further Reading On Commercial General Liability Insurance
- CGL Exclusions Explained
- Contractors General Liability Insurance
- Difference Between General Liability And Auto Liability Insurance
- Does General Liability Insurance Cover Subcontractors?
- General Liability Insurance Claims-Made vs Occurrence
- Product Liability Insurance vs General Liability
- What Damages Are Covered By A CGL Policy?
- What Is Products And Completed Operations Coverage?
- What Is The Difference Between Per Occurrence And Aggregate Liability Limits?