Product liability insurance protects Australian businesses from claims of injury or damage caused by products they manufacture, supply or sell.
Product liability insurance is designed to protect businesses against legal and financial consequences when a product they manufacture, supply or sell causes injury or property damage to a third party. This type of cover is essential for any business involved in the production or distribution of physical goods, regardless of size or industry.
In Australia, liability can arise even if the business is not directly at fault. For example, a retailer may be held responsible for a defective item supplied by a third party. Claims can stem from design flaws, manufacturing defects, improper labelling, or contamination. Legal costs alone can be substantial, and compensation payouts may threaten the viability of a business.
Typical coverage includes:
- Legal liability for injury or property damage caused by your product
- Defence costs, even if the business is not found liable
- Third-party claims arising from product faults or failures
Common exclusions include:
- Claims made by employees (covered under workers compensation)
- Damage to your own property
- Cyber incidents or defamation
- Undisclosed product changes or misleading product information
Product liability insurance is often bundled with public liability cover, but it specifically addresses risks tied to the product itself rather than general business operations. It is relevant for manufacturers, wholesalers, retailers, importers, and even market stallholders or online sellers.
Without this cover, a single claim could result in significant financial loss, reputational damage, or business closure. Product liability insurance provides peace of mind and ensures businesses can continue operating confidently, knowing they are protected against the unexpected.