Product Liability Insurance -Is it necessary?

[Spearmint]

At the moment, I'm not even sure if I need to look into this (part of me doesn't want to!), but I need to ask. If I ask someone that sells insurance, of course I'll need it, but I don't want to buy it if I don't need it.

Presently, I'm unable to disclose the actual product that I'm intending to sell but in an attempt to get my question answered I've knocked together a list of different products that may or may not require insurance, and I'd appreciate your views.

kitchen knife
skipping rope
Rubiks cube
mobile phone
remote control toy helicopter
yoyo
air rifle
peanuts

They all carry some risk although some are more obscure.









A

 

[JamieM]

Not a legal requirement but highly recommended.

If you aren't insured, something happens and you get sued, you're likely to be out of business.

 

[Spearmint]

Not a legal requirement but highly recommended.

If you aren't insured, something happens and you get sued, you're likely to be out of business.

Thank you for replying. I took a look at your website and saw the products that you are selling. From your reply, no doubt you have that insurance, but from what you are selling I see no risk!

My product is more risky, but if I was selling what you sell I probably wouldn't have opted for it.

Is it expensive insurance?

 

[Paul Kelly ICHYB]

Spearmint, your list is irrelevant!

If you are selling any product, you should have product liability. The more potential danger your products may offer, the better the cover.

 

[Spearmint]

Spearmint, your list is irrelevant!

If you are selling any product, you should have product liability. The more potential danger your products may offer, the better the cover.

I had a feeling that it was going to be required!

Can anybody recommend any particular companies? I did a quick google search and it looks like there's quite a few to choose from!

 

[ZboMotor]

Hi

Difficult to give you any specific advice without having a full discussion to determine what you are selling and how you are selling it.

It is generally the case that if you are selling a product you can only purchase Public/Products Liability cover via a package insurance i.e. a shop policy or a business combined policy if you operate from a warehouse. Don't be put off by the sound of these policies as a simple shop package can be as low as £250 per annum and would give you coverage for a whole lot more than just Public/Products Liability.

Please give me a call if you wish to take this further. Call 0800 542 2742 and ask for Daniel Severin. I work at Plan Insurance and we specialise in commercial insurance.

Kind Regards

Daniel

 

[lockyer]

Hi Spearmint,

Whilst you may be reluctant to buy it, product liability is a must for any business, but it needn't break the bank.

Most small business products, either retail, wholesale, or working from home packages bundle this in with the public liability, and start at £150 PA upwards.

The liability premiums are generally based on on your turnover, so whilst you are starting up the costs will be minimal, and can be spread over the year

 

[lockyer]

to play devils advocate, my response to possible risks in the products you have chosen are;

kitchen knife - handle breaks causing the operator to cut themself
skipping rope - person injures themself, and sues due to lack of safe instruction
Rubiks cube - bad adhesive causes sticker to come of and child chokes
mobile phone - ariel comes off causing choking
remote control toy helicopter - fault causes the helicopter to crash into someone injuring them.
yoyo - lack of instruction causes injury
air rifle - fault on rifle causes injury
peanuts - choking/allergy/food poisoning risk

 

[Spearmint]

Its not that I'm reluctant to buy it, its more to do with its relevance if my product is used for the wrong purpose.

For example, if an irresponsible customer buys a bow and arrow which is sold on the basis that it is going to be used on archery ranges for target practice, but decides to use it for another purpose and injures somebody in the process, is anybody associated with its design, manufacture or sale, in any way responsible?
I would hope not, but I'm not entirely sure. I'm also not sure if there is any insurance available that does cover this sort of misuse.

At some stage I will have to purchase public liability insurance as well, so if I look for a package that covers the product as well, then that may be the best approach.

However, I'm intending to trade as a sole trader, but if I'm unable to cover all of the risks even with insurance, then perhaps I should be trading as a limited company.

 

[123Simples]

Public Liability Insurance would be recommended. Axa are fairly comprehensive.

You are only responsible if you sell an item that is not fit for purpose, or has a dangerous or inherent fault that you knew about. People kill other people with knifes but I don't see the victims family being able to sue the manufacturer or sales company (unless of course the sales company sold the knife to an under age person)

 

[flare91]

I didn't think I'd need it, but the more I thought about it, the more I thought "there's bound to be that *one* person who may do something stupid", and it's always better to be safe than sorry. Therefore, I would highly recommend it!

 

[Spearmint]

Public Liability Insurance would be recommended. Axa are fairly comprehensive.

You are only responsible if you sell an item that is not fit for purpose, or has a dangerous or inherent fault that you knew about. People kill other people with knifes but I don't see the victims family being able to sue the manufacturer or sales company (unless of course the sales company sold the knife to an under age person)

'fairly' is generally the operative word when it comes to insurance claims!

 

[Simply Business]

I didn't think I'd need it, but the more I thought about it, the more I thought "there's bound to be that *one* person who may do something stupid", and it's always better to be safe than sorry. Therefore, I would highly recommend it!

Insurance will always be something that you purchase and never want to use - but if you do, then you know it's there and that as long as you're covered correctly, it'll protect you.

 

[insurancebloke]

You have some good advice already. Buy it!

The issue is not if one product or another requires Products Liability insurance but that if you sell any product in the EU you need the protection this cover offers. Irrespective of who makes it and who is responsible ultimately for any defect that causes injury, as the UK seller it will be to you that the legal claim comes if there is a problem.

With an insurer on board you then let them resource defence lawyers and argue the case with the claimant at their cost.

No insurance and you get to do this yourself - with legal fees at £200+ per hour and potentially a successful award in the courts, your business just won't survive.

It isn't just about the product either - advise someone to use it incorrectly and there is an injury? Yep - you are to blame. Fail to advise someone in how to use the product safely? Same again. It's a minefield of EU and English Law. If you export then the situation is much worse. If you import, the chances of passing a claim to a Vietnamese or Chinese manufacturer? Not good!

Just insure the Public and Products Liability risk as advised and sleep well at night.

 

[lockyer]

Well done on the award last night jappie

 

[Simply Business]

Thanks guys, congratulations to yourself by the way!