USA Product Liability Insurance

Talk to a member of our Mansfield based Specialist Insurance Brokers today.

What is USA Product Liability Insurance?

USA Product Liability insurance protects a business against legal action where it has been alleged their product has caused a loss, done damage, or caused injury to a third party, such as a member of the public. This type of insurance cover will provide legal defense and where applicable pay compensation to the claimant should the allegation be proven.

Does my business need USA Product Liability Insurance?

If you are selling products to, or in the USA, the answer is yes, you do.

Claim culture in the USA is very much about ”litigation now, ask questions later.’’ It’s not the same as the legal system in other parts of the world, particularly the UK. The legal side of things works differently and the Dollars involved can be much larger than the Pounds in the UK, just the legal costs involved can be considerable.

If you are already selling in the USA or Canada, perhaps you are exporting to some of the big-name supermarket chains, you’re an Amazon FBA seller in the US, or a Shopify Drop-Shipper.

Insurance for exporting to the USA and Canada, whilst not compulsory it’s prudent that you have the correct insurance cover in place, whatever you are selling. Whilst it is easy to think that it won’t happen to you, you might be right, until that is your product becomes faulty or breaks and causes a loss, and even if it’s not your fault the legal costs to defend a claim can be substantial.

If you are an established UK business you will almost certainly have Product Liability insurance in place, if your exporting turnover remains to the US then the chances are your insurer in the UK can accommodate your needs! Unless your insurance company is already a specialist in the USA marketplace and is used to US Exports then as you grow the percentage exported to that part of the world you may very well find that they are not so accommodating.

This is where you need to be dealing with a broker who knows the market, as well as the different requirements, extensions and terminology used…

Some of the terminology used when dealing with the USA can differ greatly from that seen in the UK, Vendors Extensions, Dual Insured, Hold Harmless Agreements and then there are things called Acord Forms…

So what are all these different terms?

What could possibly go wrong…

Well, a lot actually!

Even when a product has been designed and manufactured to the highest possible standards using the best quality products, components and materials, things can and do go wrong, and if it does you could very well be in line for a product liability claim.

The scenarios for a product liability claim for exporters to the US are a little different to anywhere else, products can break or malfunction and this is where your product liability insurance will be there to protect you and your business. Simple things like a bottle breaking and spilling its contents on someone’s leg. They allege the contents burnt their skin which could mean a very costly claim. The scenarios are endless, responsible or not just the legal cost could mount to a significant figure.

Whilst it is easy to think of what a product itself might do, it is much wider than this. Who has supplied the instructions or manuals, if you have written the instructions or operating manuals any loss from inaccuracies could very well come back to haunt you. Instructions translated to another language need to be done professionally.

Instructions translated from your Far East supplier might translate differently than you had intended – the result is a potential claim.

Remember, Product liability insurance protects you or your business against the legal and compensation costs arising from injury, loss or property damage as the direct result of someone using your product.

How do I know what Product Liability Limit of Indemnity my business needs?

What is the limit of indemnity? A Limit of Indemnity is the financial maximum (pre-agreed policy limit) amount your insurer would pay should a claim arise.

One important thing to remember when buying Product Liability Insurance is that the cover is referred to as ”in the aggregate”. An explanation is provided here, but in simple terms, and a very important point to remember is that the cover provided is in “any one period of insurance”, rather than any one claim.

Just purchasing the lowest indemnity limit available isn’t necessarily the best route – while something is better than nothing it’s important to note that you could quickly run out of money. Its important that there is sufficient thought going into what might happen and how much you might need to defend your business.

What if I already have Product Liability Insurance?

Congratulations, you recognise the risks involved, this is fine if you’re only selling to UK and other worldwide markets. As as soon as you start exporting to your customers in USA and Canada you need to ensure that the product liability insurance extends to that region.

I manufacture products for a UK company that sells to the USA, do I still need cover?

Many business insurance policies exclude coverage for products sold in North America and Canada. Sometimes you might be aware that your products are going to the USA or Canada but you are selling to a UK business first which then sells to an American customer, usually referred to as whitting and unwitting USA exports. If you know your products are being exported, it’s always wise to let your insurer know.

Where can I find suitable USA Product Liability Insurance?

Confused and frustrated about obtaining USA Product Liability insurance? Speak to us first, we are an experienced and knowledgeable commercial insurance broker specialising in product liability insurance for businesses that export to the USA and Canada.

What products have we dealt with?

Food & Drink Exporters

Automotive Component suppliers and manufacturers

Homewares

Electrical devices

Consumer and Industrial Electronics

Machinery Parts

Do I need other types of insurance as an exporter?

Other important covers you might need when exporting to the USA…

Why deal with us for your USA Product Liability covers?

Dealing directly with brokers used to this territory means that we can act fast with the specialist markets needed. We are not a call centre and we certainly do not use AI to ask you all the questions.