Every customer expects to purchase safe and reliable products from businesses operating in South Africa. Product defects can lead to injury, illness, or even death of customers at times. If one of your products harm the customer in any way, he or she can sue your business, which may lead to costly legal settlements and fees. Product liability settlements can easily reach six figures and drain your financial resources. That is where product liability insurance becomes so important. Here is why your company needs product liability insurance if you manufacture or create products for your customers.
What Is Product Liability Insurance?
Product liability insurance covers your business financially from any claim a customer may initiate against your company if injury, illness, or death occurred from using one of your defective products. Products are usually categorised as equipment, software, or food items that your business supplies. If you don’t have product liability insurance, you will have to pay out of your pocket for any legal fees, medical costs, and settlements that arises from a customer lawsuit. Your business may go bankrupt before long if you have to face such lawsuits on your own.
What Can Customers Claim For?
Your customers can claim the following benefits by initiating a product liability lawsuit against your business:
- Medical costs for physical and psychological damages experienced by the customer
- Future medical costs when treatments are prolonged
- If the customer is unable to work due to his/her injuries, they can claim current and future lost wages
- Legal fees incurred as a result of initiating a lawsuit against the business
What Does Product Liability Insurance Cover?
Although you might be doing everything to guarantee the safety and reliability of your products, mishaps can still occur. Product liability insurance will protect your business in case a customer initiates a product liability lawsuit against your business. Here is what product liability insurance covers:
- Manufacturing and production flaws – Product liability insurance covers manufacturing and production flaws
- Design defects – Even if your products are rigorously tested, defects can still occur after production. Product liability insurance covers design defects
- Response for packaging and warning issues – If you don’t provide adequate defect warnings or instructions, your customer can sue your business for not properly warning them about the dangers or health risks of using the product. Product liability insurance will protect your business from these types of lawsuits
How To Purchase Product Liability Insurance?
The best way to purchase product liability insurance is through a reliable insurance broker in South Africa. That way you will have access to a wide variety of product liability insurance products in the market. The insurance broker will help customise the cover to meet your business needs and budget. Make sure you work with a reliable insurance broker on the market when shopping for product liability insurance in South Africa.
Custom Insurance is your trusted partner for product liability insurance covers in South Africa. Call us today to purchase the most suitable product liability cover for your business.
