Does Product Liability Cover Manufacturing Defects?

A manufacturing-defect allegation concerns a product that departs from its intended design during production, assembly, or quality control. The Insurance Information Institute identifies manufacturing and assembly as product-liability risk areas, including when a contract manufacturer makes a flawed item. A covered claim is about legal liability for resulting injury or damage; fixing or replacing defective units is a different cost.

Check whether the policy lists all products and manufacturing operations, including contract manufacturers and component suppliers. Review products-completed operations wording, the damage-to-your-product exclusion, limits, and any product-specific endorsements. Do not treat a recall as the same thing as a liability claim. Provide names of contract manufacturers and the quality controls you rely on, and check whether additional insured or vendor endorsements are needed. A policy schedule may not automatically update when production moves.