product liability insurance

insurance

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The Information Architects of Encyclopaedia Britannica

Last updated

July 13, 2026

Quick Summary

Product liability insurance is a type of business liability insurance that protects manufacturers and sellers from claims of harm caused by defective products. This insurance covers losses resulting from acts or omissions that are legally deemed negligent and cause damage to others' person, property, or legitimate interests.12

Key aspects include:
* Negligence: Failure to exercise reasonable care in manufacturing or to warn consumers of dangers.2
* Breach of Warranty: Failure to meet claims or promises about a product's quality or performance.2
* Strict Liability: Manufacturers can be held liable for defects even without negligence or breach of warranty.2

This insurance is crucial due to increasingly high court awards and public expectations for product safety. It can cover claims even if a product was misused, and the insurer typically defends lawsuits and pays settlements up to the policy limit.13

Summary created from Britannica articles using AI. AI can make mistakes, so verify using Britannica articles.

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