What Does Product Liability Insurance Cover?

A product-liability claim often alleges that a product caused someone’s injury or damaged property. The Insurance Information Institute describes that third-party exposure for manufacturers, distributors, and sellers; California’s Commercial Insurance Guide lists products liability and completed operations among commercial general liability protections. An illustrative ISO CGL form covers sums the insured is legally obligated to pay for covered bodily injury or property damage, subject to conditions and exclusions.

That does not mean the policy pays to repair your own product or fund every recall. Check the exact products-completed operations wording, insured entities, territory, limits, deductible, and exclusions for your product category. The claim also must satisfy conditions such as the policy period, occurrence trigger, and covered territory. A product being defective is not alone enough to establish an insurer’s obligation to pay.