Starting or running a business involves numerous risks, especially when products are involved. One of the most effective ways to protect your business from potential liability is with Product Liability Insurance. In this blog post, we'll discuss what product liability insurance is and how it covers your business in various ways, as well as how much coverage you need and the associated benefits.
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What is product liability insurance?
Product Liability Insurance is a type of insurance that provides protection for businesses when their products cause property damage, bodily injury, or death to customers. It helps cover the costs associated with defending and settling claims against your business due to any losses incurred because of a product you have made, sold, or distributed. This includes damages related to design defects in manufactured goods; improper labeling or packaging; inadequate warnings; and breach of warranty. Without this coverage, businesses would be completely exposed in such cases and face devastating financial losses and significant legal fees.

What does product liability insurance cover?
Product liability insurance covers a wide range of potential claims related to the sale and distribution of products. These include any injuries or losses due to design defects, manufacturing defects, inadequate instructions or warnings, improper packaging or labeling, breach of warranty, and other similar issues. In addition to covering the associated legal costs, it can also provide coverage for damages awarded by a court in such cases. This type of insurance is critical for businesses that produce, distribute, or sell products as it helps protect them from financial losses if they are held liable for an injury caused by their product.

How much coverage do you need?
The amount of product liability insurance coverage you need will vary depending on the size and scope of your business. Generally speaking, the larger the business and its operations, the more coverage that is necessary. It would be best if you also considered factors such as expected sales volume, types of products sold or distributed, locations where goods are sold or stored, and any potential legal risks associated with those activities. It is important to speak with an experienced insurance agent who can help determine how much coverage is appropriate for your particular situation.

In addition to determining how much coverage you need in terms of dollar amounts, it's also important to make sure your policy meets all applicable state laws regarding product liability protection. These may include requirements related to minimum limits of liability as well as specialized provisions tailored to specific industries or types of businesses selling products. Taking the time to ensure you have adequate coverage can save you a great deal of money and stress down the road if there ever is a claim against your company due to a defective product causing damage or injury. It's also wise to consider Excess Liability or an Umbrella. 

What are the benefits of having product liability insurance?
The primary benefit of having product liability insurance is that it provides financial protection against potential lawsuits related to the sale and distribution of your products. This coverage helps to pay for legal costs and damages awarded by a court if you are found liable for an injury or loss caused by a product defect. In addition, this type of insurance can help protect your business assets from seizure, which would otherwise be used to satisfy any judgment against you. Finally, product liability insurance may also provide peace of mind knowing that your company has some form of protection in place should any claims arise in the future.

Product liability insurance is a critical component of any company selling up goods. Not only is having the insurance benefits in the event of a lawsuit, but it can also provide peace of mind and protection from any financial ruin should a product fail to perform as expected and leads to damage or injury. The policy will provide coverage for legal costs, settlements, or judgments, as well as medical expenses that may be associated with the use of your product. Depending on your business's size and requirements, you should determine just how much coverage you need in order to make sure that all instances are covered adequately.

If you have any questions about Product Liability Insurance, please feel free to contact me. 

Jason Matison
Commercial Insurance Agent
​Austin, Texas

Every business, no matter what the size, has a D&O exposure.  Some people may mistakenly think that D&O risks are just for large firms, but actual court cases tell a different story.  D&O claims come about because of decisions made by the firm’s officers and employees.  Claims can come from employees, competitors, investors, and the government.  Most of these kinds of claims are not covered under a standard commercial insurance policy.

Here are some interesting facts brought to you by the Insurance Information Institute:

• Over 53% of privately held firms have had D&O related claims.
• Twenty-five percent of companies have had an employment related claim.
• The average defense cost for a D&O claim is around $75,000.
• Firms with less than 50 employees have the same percentage of claims as larger firms.

Here are some of the kinds of claims to which your business is exposed:

Misrepresentation
If you misrepresent your company’s services, financials or other information, third parties may sue you for your actions.  This can include services you say you provide on your webpage or financial information you provide to a lender.

Breach of Duty
Your firm’s officers and employees are required to carry out their duties with a standard of honesty and professionalism.  If these legal duties are breached, you are subject to litigation by the injured party.

Employment Issues
Your employees can sue the business for a variety of employment issues that can be covered under employment practices liability policy which can be included in a Management Liability/D&O policy (make sure to verify EPL is included and know our limits).

Landlord Insurance or Lessors Risk Only (LRO) can be complex. Owning commercial property can definitely yield a sizeable ROI, however, there are some things you need to keep top of mind when it comes to your investment properties. With the explosion of commercial growth in Austin, I've had the privilege of spending a lot of time with building owners and investors. Here are some tips that will help you navigate the waters of Business Insurance when it comes to Lessors Risk Insurance (LRO), also known as Landlord Insurance. 

1. Tenant Insurance Requirements
Make sure to check with your insurance company on this requirement. Typically, at the very minimum, your tenants should carry liability limits equal to or greater than yours and also list you as an Additional Insured on their policy. Bottom line, it should be in the lease and followed up on. 

2. Keep an Eye on Vacancy
Insurance companies do not like vacant spaces. If you are at less than 70% occupancy, it could have an impact on how your policy will respond should there be a claim/loss, especially a vandalism, theft or water claim. 

3. Business Income
Being able to pay banks and taxes if a covered peril were to happen could make or break your investment. Don't skimp on this coverage. Also make sure your tenants carry it. 

4. Building Limit (Property value)
Inflation is inevitable. As we've seen recently, labor and material costs can increase quite rapidly, makes sure you review your policy limits. Also make sure you insure at Replacement Cost. It might cost more than Actual Cash Value, but come claim/loss time, you'll be glad you did. This limit does not include land. 

5. Deductible
Review your property deductible and your wind/hail deductible. Sometimes they are the same, sometimes they are not. Make sure you are comfortable with your deductible. 

6. Building Updates
Insurance companies love updates. Make sure you let your insurance agent know if you update any of the following:

- Roof
- Plumbing
- Electrical
- HVAC

It could save you money, enhance coverage or prevent a nonrenewal. 

These are just 6 tips or suggestions. If you want to discuss in more detail or have questions about Business Insurance please feel free to contact me. I am local and would love to work with you. 

Jason Matison
Commercial Insurance Agent
Austin, Texas