What Is Product Liability Insurance?
It is liability coverage for claims that a product you make, distribute, or sell caused bodily injury or damage to someone else’s property.
Product liability insurance addresses third-party claims alleging that a product caused injury or property damage. The Insurance Information Institute describes protection for manufacturers, distributors, and sellers when a defective condition caused personal injury or damage associated with product use. A business can face an allegation based on its role in the product’s design, manufacture, packaging, warnings, distribution, or sale.
Coverage may be part of a commercial general liability policy’s products-completed operations coverage or written separately. Check which products and legal entities are insured, the policy’s territory, limits and exclusions, and whether defense costs reduce those limits. The phrase describes the risk being insured, not one universal policy form. Read the actual grant of coverage and definitions to see whether bodily injury, property damage, and defense of suits are included.
Related Coverage
Sources
- Facts + Statistics: Product liability. Insurance Information Institute; Product liability insurance opening definition (manufacturer, distributor, or seller; defective condition causing personal injury or damage); Product recall insurance sentence. Accessed 2026-09-25.
- Product liability, recall and contamination insurance. Insurance Information Institute; Product liability opening (design/manufacture/distribute/sell; injury, property damage or death; added to GL or stand-alone); What could go wrong? (roles; directions/warnings); Covering the costs of a product recall; Contamination insurance. Accessed 2026-09-25.
- Commercial Insurance Guide. California Department of Insurance; Commercial General Liability Coverage: premises, products liability and completed operations; major exclusions including damage to your work, impaired property, sistership liability and failure to perform; Limits of Insurance products and completed operations aggregate; glossary Sistership Liability. Accessed 2026-09-25.
- Commercial General Liability Coverage Form. ISO Properties, Inc.; specimen hosted by Hiscox; Recall exclusion p.5; Supplementary Payments pp.8–9; Section III limits p.10; V.16 and V.21 p.15, warnings/instructions continue p.16. Accessed 2026-09-25.
