Most businesses involved in manufacturing know they need to purchase products liability coverage. When providing products liability insurance quotes, we are often asked about the difference between products liability versus general liability.
Products Liability versus General Liability
In reality, products liability (or product liability) is a component of general liability insurance. Unless otherwise excluded, a standard ISO general liability policy includes an aggregate coverage limit for “products and completed operations“. This limit is separate from the “general aggregate” that covers claims other than products/completed operations.
For a manufacturing business, products liability is priced based on the type of goods being produced (the potential for bodily injury or property damage claims) and the estimated gross revenue derived from the sale of the goods. Many insurance carriers that offer products liability coverage have minimum premiums – often between $5,000 and $10,000 per year – depending on the type of goods being manufactured.
General liability also provides coverage for the premises and operations of a business. This can include the factory, warehouse, and office space needed by the business. Claims arising from the premises might include a slip and fall injury or damage caused by an employee at a customer location.
Products liability provides coverage for bodily injury and property damage that result from the use of your product. It is important to note that products liability does not provide coverage for claims of defective or faulty design alone unless that defect causes injury or damage. Products liability coverage also does not address the expense of a mandatory product recall. However, there are other types of liability insurance – such as professional liability and products recall coverage – that can be purchased separately.
The answer to the question of products liability versus general liability, in summary, is this: general liability provides coverage for your operations, premises (location), completed operations (such as construction work) and your products.
Get a Products Liability Insurance Quote
Safeguard Insurance has been offering affordable products liability coverage since 1998. We are licensed to write this coverage in Nevada, Utah, Arizona, California, New Mexico, Idaho, Oregon, Washington, and Texas. Contact us at 702.638.0022 for additional information or a no-obligation quote.