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Your Business Is Not Covered Automatically

Updated: Aug 29, 2022

Product liability insurance When you have a business producing, selling/manufacturing a piece of equipment, you might face liability if the product damages others. Your company may face lawsuits when selling tools that have defects that hurt customers.

Even though the customer misuses it, your company is responsible for any damages because of your product. Product liability insurance can be a crucial part of an enterprise insurance plan.

Product type affects insurance costs.

Product liability policies and premiums can depend upon what product you manufacture or sell. The higher the premium, the product has higher the chance of causing damage or injury to another person.

Insurance rates for product liability cover the entire spectrum of risk. Sales of safe products like office equipment and stationery are down. The more risky items can be furniture, electronics and bicycles.

The most dangerous products are foods, drinks, and those marketed to children. It is also the most expensive in terms of liability insurance.

Who needs product liability insurance?

You likely need product liability protection when you manufacture, distribute, sell or install a product.
A business often buys product liability coverage and construction contracts because it offers financial support when a consumer chooses to sue the company for damages resulting from a faulty product.
If an installation of custom cabinetry is defective or the door hardware is damaged.
Product liability insurance may help pay for the repair.

Why is product liability insurance important for small businesses?

It does not matter where you are in the supply chain. You could be held liable if you handle the product at any stage.


Product liability insurance is a policy that helps prevent the loss arising out of legal liability incurred by an insured due to injuries or damages from using a covered product or the liability incurred by an insured following completion of the work.

How much does product liability insurance cost?

The industry can affect product liability premiums. Generally, a small company pays $1192 yearly for product liability coverage. The costs associated with product liability coverage include: I could not determine the average price in South Africa.

What does product liability insurance cover?

Insurance policies cover the costs of litigation and compensation for third-party actions. Product liability insurance covers defects involving your product, namely:

-Manufacturing defects

-Design defects

-Failure to warn of dangers

Product liability does not cover intentional damage or losses, general business liabilities, and damages due to poor workmanship.

What is the difference between the product and public liability insurance?

There is no distinction between public liability and product liability.

What do products mean in insurance?

Insurance Products are any insurance, indemnity and annuity products that provide liability for losses caused by certain conditions.

Legal fees

The costs for defending the client or any legal fees arising from the claim are subject to limits in the policy schedule.

Medical costs

Medical costs incurred due to physical or psychological damages suffered. Long-term medical expenses if treatment is prolonged.

Product liability lawsuits

Your business is responsible for making things right. Product liability insurance can help protect you if your business faces a lawsuit. In 2014, there were 58,496 personal injury/product liability cases – a 20% increase from 2013. One law firm found the average jury award in product liability lawsuits in 2012 was $3,439,035, with the median award totalling $1,503,339.20. With increased claims and the high cost of cases, product liability coverage has become all the more important for small businesses. Getting hit with a product liability lawsuit is an expensive and stressful experience. South African courts were reluctant to grant high compensation for claimants, but it is quickly busy changing and following other countries. If you previously did not worry about the liability that may come from products you manufacture, distribute, sell or install, you should take note.

Strict liability

A general liability insurance policy can help cover product liability claims related to design defects before the product is made.

Manufacturing defects occur while the product gets made. Strict liability means a customer gets hurt by a manufacturer's product, even if the business owner isn't found negligent. An improper warning can happen if a business owner doesn't give a customer enough warning on the proper use of a product.

Product liability insurance is not a one size fits all product, which means that pricing can vary greatly from business to business.

The best way to find out how much it will cost for your company is to get a quote from an insurance provider.

Compensation claims

To buy product liability insurance in South Africa.

You can buy product liability insurance directly from an insurer or a specialist broker registered with the FSCA. You are welcome to follow the link provided for AS Brokers to assist you.

AS Brokers CC

Get Great Coverage. All it takes is a few clicks.

Product liability insurance helps protect your business from claims that a product you made or sold caused bodily injury or property damage to someone else's belongings.

An insurance company may offer this coverage as a standalone policy, but we include it as part of your general liability insurance.

Without product liability coverage, your business could have to pay out of pocket for costly general liability claims related to product defects.

Improper warning

Design defects existed before the product was made. Manufacturing defects occur while the product gets made. Strict liability means a customer gets hurt by a manufacturer's product, even if the business owner isn't found negligent.

An improper warning can happen if a business owner doesn't give a customer enough warning on the proper use of a product.

Be aware that product liability insurance isn't the same as product recall insurance.

You'd have to buy an endorsement for your business insurance policy to cover product recalls.

Albert Schuurman

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