Product liability insurance covers claims that a product you made, sold or distributed caused bodily injury or property damage. For most businesses it sits inside general liability as the products and completed operations hazard, with its own aggregate limit. Product recall costs are a separate exposure and usually need a separate policy.
What it usually covers
- Injury or property damage caused by products you make, sell or distribute
- Claims after the product has left your control
- Defense costs for covered claims
- Vendors who sell your products, when added as additional insureds by endorsement
- Recall expenses, lost profits and customer costs only under a separate recall policy
What it usually leaves out
- The cost to recall, withdraw or replace your own product under general liability
- Damage to the product itself
- Financial loss from a product that fails to perform, without physical injury or damage
- Known defects and products sold after a problem was identified
- Professional design advice, which may need professional liability
Who typically needs it
- Manufacturers and private label brands
- Importers and distributors
- Retailers and online sellers, especially of imported goods
- Food and beverage producers and consumer product makers
What shapes the price
- 01Product type and potential for injury
- 02Sales volume and where products are sold
- 03Manufacturing location and quality controls
- 04Contracts with suppliers and retailers
- 05Claims and recall history
How limits and terms work
Products and completed operations has its own aggregate limit, separate from the general aggregate under most general liability forms.
Retailers often require their suppliers to name them as additional insured through a vendors endorsement.
Recall insurance is usually a standalone policy covering costs such as notification, retrieval and disposal, subject to its own terms.
Questions to ask before you buy
- Does our general liability include products and completed operations
- Is the products aggregate high enough for our sales and contracts
- Do retailers require a vendors endorsement
- Do we need separate product recall coverage
Products liability and recall questions, answered
Does general liability include product liability?
Most standard general liability policies include the products and completed operations hazard, which covers injury or damage caused by your products after they leave your control. It has its own aggregate limit. Some policies exclude certain products, so confirm the products you sell are disclosed and that the hazard is not excluded.
Does product liability insurance pay for a recall?
Usually not. General liability excludes the cost of recalling, withdrawing or replacing your own products. Product recall insurance is a separate policy that can cover notification, retrieval, disposal and related costs. Food, beverage and consumer product businesses most often consider it, and terms vary widely between insurers.
General information only. Coverage, limits and exclusions depend on the policy an insurer issues and the state where you operate.