Most businesses that sell products know that they might have product liability issues surface in the future, but few understand if they need liability insurance, or what type of liability insurance to get. Business liability insurance does usually have some product liability coverage, but some businesses will actually need a policy specifically for product liability.
One way to evaluate whether or not your business needs an insurance policy for product liability risks is to consider the risk level of the products you sell. Do you sell anything that could logically cause harm? For example, if you sell tools, such as hammers, screwdrivers, power tools, and utility knives, it’s not unreasonable to think that your products could cause physical injury or damage to property if an accident happens, or if they are improperly used.
If you sell clothes, on the other hand, the risk of property damage or injury is much less. Considering the risk level of your products is one of many ways to determine if you need a product liability policy.