| Prompt Insurance Agency, LLC |
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| Questions? Call (949) 351-8767 |
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Product Liability Insurance provides coverage for a manufacturer's or distributor's liability for death, injuries, or losses to a user, bystander, or buyer when caused by a defect or malfunction of the product produced or sold by the policyholder. In some cases, limited product liability may be covered by an existing commercial liability policy. Although there are many ways to defend against a product liability lawsuit - it is best to have significant coverage if you are the primary purveyor of a product that holds significant potential for bodily injury or property damage and/or loss. Abnormal use of a product other than the use for which the product was intended may be a good defense against product liability claims. However, if your products are found to have active malfunctions - your risk may be substantial. An active malfunction occurs when the product performs as designed but also causes collateral damage to the user. Active malfunction claims are usually covered under product liability insurance. An example of an active (product) malfunction would be a medication that treats a condition but also triggers a negative reaction in a statistically significant number of users. Probably the worse case in history of an active product malfunction was Thalidomide - a German drug introduced in the early 1960s for nausea in pregnant women that also caused horrifying birth defects in a substantial percentage of newborns. Although there are many defenses for product liability - the safest course of action is to acquire insurance coverage for the huge legal defense bills as well as potential judgments that might result from product liability allegations. Your Prompt Insurance Agency insurance agent will assist you in determining the best type of product liability policy to fit your needs. |
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