What product liability insurance covers
Product liability insurance covers claims that a product your business sold, made, repaired or supplied caused injury to someone or damage to their property — the hair product that causes a reaction, the appliance that overheats, the component that fails in use. It pays compensation and the legal costs of defence.
Liability can attach even when the fault wasn't yours: sell or import a product and, in some circumstances (own-branding, imports from outside the UK, or an untraceable manufacturer), you can be treated as the producer.
Who needs it?
Manufacturers, obviously — but also importers, wholesalers, retailers, online sellers, and trades who install or repair goods. Food and drink businesses, cosmetics sellers, toy and electrical retailers carry higher exposure. If anything physical passes from your business to a customer, some product liability exposure exists.
How much cover, and what it costs
Cover is usually sold alongside public liability with a shared limit — £1m to £10m. Set it by the harm your products could plausibly do and what retail or platform contracts demand (marketplaces often set minimums). Premiums track your products' risk, sales volume and where goods are sold — exports, particularly to North America, raise both risk and price.
Reducing your risk
Insurers — and courts — care about diligence: keep supplier and batch records so products are traceable, retain quality-control evidence, keep instructions and warnings clear, and act quickly on complaints and recalls. Good records both prevent claims and defend them; an untraceable supply chain quietly turns you into the deemed producer.
Getting the right policy
Product liability is usually a checkbox inside a combined policy — the work is making sure the limit and territory match how and where you actually sell. A broker will align it with your contracts and supply chain. Find a business insurance specialist through Nesto — free, no obligation.