As an entrepreneur, it’s important to understand the risks involved with running a small business that can really threaten your bottom line. Risk and uncertainty need not hold you back! Take some time to think about protecting your small online business so that you can focus on making sales whilst managing your risks.

Whether your small business is mini, or having a growth spurt, product liability insurance is crucial - it could protect you if your product damages, injures or harms someone or someone’s property

The Basics Of product liability Insurance

Product liability covers injuries and damages caused by a specific product you manufacture, supply, or sell. This means if your product overheats or explodes, if the instructions are unclear or misleading, if your product causes harm to a person or if it causes damage to their property, product liability insurance could help pay for damages.

If your business falls under this category, talk to us about a policy today.

Who needs product liability insurance anyway?

Don't be fooled into thinking that the products you sell in your small business are too low risk to need this kind of insurance protection, as you may be wrong. Just take a look at recent news, anyone may find themselves liable for a claim against their business.

When you deal with products in any way, more insurance is definitely less hassle in the case of a legal claim.

In a nutshell product liability covers

• The design of the product (a product design can have flaws from the start)
• The manufacturing during creation, build or production
  
• The marketing, such as improper instructions or missed warnings

What types of small businesses need product liability insurance?

• Restaurants, diners, cafes, and bars
  
• Bakery shops and food shops
  
• Coffee shops and juice bars
  
• Print shops, merch suppliers, and clothing printers
  
• Wholesalers, vendors and drop shippers
  
• Online retailers (like eBay, Etsy, Amazon, Facebook marketplace etc.)
  
• Equipment suppliers and tool suppliers
  
• Software manufacturers and distributors
  
• Pet food, supply shops and toy shops
  
• Health and wellness shops, wellness manufacturers and distributors and so forth…

How much insurance cover should I get?

A bit about indemnity will help you make that decision. Simply put, indemnity is one party's promise to compensate another for potential damages or losses.

You should get indemnity at a level that fits your business. With multiple limits available, you can select a limit of indemnity for the level of protection that suits your personal or business needs. The limit is the maximum amount that Lukango pays if you need to make a claim on your policy. In other words, if you are raising a valid claim and the claim is worth more than the limit of indemnity that you have chosen, then you will need to pay some of the value of that claim yourself.

Hand in hand with product liability comes public liability. It makes sense that you should not just protect your customers against faulty products that could cause damage to property or people, but you should also be covered wherever your business operates to sell these products.

Super-charged protection

This is a very interesting feature of the product liability insurance policy as it means that all your claims are covered and you are not only covered for 1 single claim. On top of this, there is also no limit placed on each aspect of the cover. It does however mean that should you make multiple valid claims in any one time period then these will be capped at the limit selected for this period.

A real example: purchase a product liability policy with a £2,000,000 limit of indemnity and under that policy if one claim is paid, that includes costs and expenses, of £1,500,000, then the limit that you have for the rest of the policy year is £500,000.

Get prepping like the best of them

Many products that we use every day can cause injuries due to defective design. When children’s toys are recalled due to a safety defect, this is usually as a result of a product liability claim. Other claims include injuries caused by defective appliances or equipment; burns from hair styling products; or injuries from contaminated cosmetic products.

What you need to know about product liability claims:

• When it comes to products there is a responsibility to keep the customers safe
• Product liability claims can be brought against the manufacturer, designer or distributor of any product that is defective and may cause injury or death
  
• Toys, appliances, equipment and cosmetics are some of the more common products that could result in a product liability claim.

What does it cost?

Remember product liability insurance can help businesses protect themselves against product-related damages, injuries, and other liabilities. This type of insurance covers injuries and damages caused by a specific product you manufacture, supply or sell.

Like any type of insurance, the cost of Lukango's public liability policy depends on your business: what type of business you have; the size of your business and, and how much the business makes. You should also take a look at the other types of insurance your business needs on top of product liability. But for less than a daily cup of coffee Lukango product liability insurance aims to protect your business against legal claims from your customers all the way along the product chain.

Don't be caught without it!

A bit about Lukango before I go

Lukango is the place where you can access the right business insurance policy for your needs. We are here to make the complex simple and we have a huge range of policies to suit all businesses. So as much as we hate to admit it, and you hope that it doesn't, accidents can happen. Don't worry, you can have Lukango public liability insurance - the full stop to worrying about your small business risks if an accident happens.