What is Products Liability Insurance?
Products Liability Insurance generally forms part of a Public Liability Policy. It can cover the costs you become legally liable to pay in compensation for claims arising from the Products you manufacture, sell or supply.
Products Liability Insurance with AUZi will pay for losses or damage as a result of your Products you sell, supply or manufacture. Products can be items you import, manufacture, retail, alter and sell and understanding the definition of a Product is essential.
Who needs Products Liability Insurance?
The list of occupations that are exposed to Products Liability claims is extensive. Below is a brief list, see the full list here.
- Cake and Biscuit Maker
- Clothing Manufacturer
- Dance or Zumba Teacher
- Make Up Artist
- Manufacturing of Wooden Models
- Natural Therapist
- Soaps or Candle maker
- Party hire
- Market Stall Holder
- Car detailer
- Cosmetics manufacturer
- Interior designer
- IT consultant
Why do I need Products Liability Insurance?
Products Liability is generally overlooked as many believe since they’re not physically making the products, that it isn’t required. Luckily as mentioned above, most traditional Liability policies include both Public Liability and Products Liability. Although, you should always confirm this by checking your documents to ensure it is included.
As a seller, supplier, manufacturer or importer of items, you may very well have a Products Liability exposure. Products Liability is not compulsory, but when providing goods to consumers it is definitely a worthwhile consideration. Once a Product has ceased to be in your physical possession or control, it is deemed to be products liability.
Your Policy wording will have specific definitions as to what a Product can be. Bear in mind that if you import products you can be deemed the manufacturer for Insurance purposes. This can also apply if you relabel, repackage, alter in anyway, service and even advertise as if it is your product. Please ensure you read your policy wording to understand the definition of a Product.
Products that you sell, supply or manufacture have requirements you must adhere to under the Australian Consumer Law which is administered by the Australian Competition and Consumer Commission. Your Products must also comply and meet with Australian Standards.
Before purchasing, please take the time to understand what a Product is for Insurance purposes and if the cover is right for you.
What are some examples that Products Liability Insurance might cover?
Scenario 1 – Candle Maker
A customer buys a candle from your market stall. They take the candle home and light it. The candle explodes and causes damage to the customers carpet and furniture.
Scenario 2 – Food
A customer buys food from a business and takes it home. The customer and their family then suffer food poisoning.
Scenario 3 – Earthmover
As an earthmover you excavate a trench. After your workers all go home for the day, a third party trips and falls into the trench.
Scenario 4 – Clothing
You purchase clothing from Kmart and add your own label and decals to the items. A customer purchases this item and it causes a reaction or damage to them.
Scenario 5 – Electrical items
You import electrical items from overseas to sell in your range. The items are faulty and catch fire, causing damage to a customers home.
Frequently Asked Questions
Yes it does UNLESS you have specifically chosen a Public Liability Only Policy for a Market Stall holder.
Absolutely, and at anytime throughout the year as long as your Products don’t fall under our hazardous or excluded list. (We also have specific policies for some of the excluded items such as Bath and Body products which are better covered under our other policies).
Absolutely. Importing items to then resell can deem you the manufacturer for Insurance purposes.
The incident that the claim has risen from must have taken place during the period of your policy.
However, please read more about this here.
Immediately after completing your purchase, you will be emailed with an invoice and Schedule of Insurance that includes a policy wording and your Certificate of Currency.