Does Product Liability Cover Design Defects?

A design-defect allegation challenges the product’s intended design rather than only one faulty unit. The Insurance Information Institute lists product design among the ways a business can face liability risk, including where a product harms someone in use. Whether a policy responds depends on the alleged harm, the insured’s legal liability, when the injury occurred, and the policy’s wording.

Check that the policy covers the relevant product line, design role, sales territory, and completed operations. Read the insuring agreement, exclusions, notice requirements, and limits; also check whether defense expenses erode the available limit. A policy does not guarantee protection from a recall or from costs to redesign unsold goods. The defense obligation can apply before a court determines whether a defect exists, but only if the allegations seek damages within the policy grant. Report a demand promptly and preserve design and testing records.