If a product fails and injures the consumer, they may have a claim against the manufacturer, distributor or importer. Sadler Product Liability Insurance specializes in placing product liability insurance at the most favorable terms. Below is important information about product liability and the cost of your insurance.
Product Liability Insurance offers coverage that protects manufacturers, product suppliers, product distributors, importers and product retailers when claims are made for injuries and damage incurred in the use of their goods or products. Product liability insurance covers any liability of a manufacturer or others in the chain of commerce of a product where bodily injury or damage to some other property is caused by a product defect.
Rates are based on per $1000 of gross sales revenues and can vary greatly depending on the profile of the product that is sold. For example, a lower risk item such as a hand or garden tool may have a rate of $1.00 to $2.00 per $1,000 of sales. A higher risk item such as a baby’s crib may have a rate of $15.00 to $20.00 per $1,000 of sales.
Minimum premiums are amounts set by the insurance carriers below which the total premiums will not fall, regardless of the computation of the rate per $1,000 of sales. Minimum premiums for lower risk products such as class one medical devices may start in the $3,000 range and minimum premiums for high-risk products such as imported children’s bike helmets may start in the $25,000 range.
According to Black’s Law Dictionary, Fifth Edition, product liability is the legal liability of manufacturers and sellers to compensate buyers, users, and even bystanders, for damages or injuries suffered because of defects in goods purchased. Although the ultimate responsibility for injury or damage in a products liability case most frequently rests with the manufacturer, liability may also be imposed upon a retailer, wholesaler, or middleman, bailor or lessor. Infrequently it falls upon a party wholly outside the manufacturing and distributing process, such as a certifier. This ultimate responsibility may be imposed by an action by the plaintiff against the manufacturer directly, by a claim for indemnification, asserted by way of a cross claim or third party claim by the retailer or wholesaler, or others who might be held liable for the injury caused by a defective product. Under modern principles of products liability and with the elimination of privity requirements in most instances, recovery is no longer limited to the purchaser of the product, or even to a user. However, it may extend to the non-user; such as a bystander who is injured or damaged by a defective product.
There are three types of defect in product liability. You can visit Legal Theories of Recovery for Product Liability Lawsuits for more information on how these defects could results in a successful product liability claim against your company.