What Does Product Liability Mean?
Product liability is the responsibility of a manufacturer or vendor to be accountable for the quality of the goods it produces or sells and be subject to lawsuits to pay for damages caused by defective products. In the context of insurance, many companies purchase product liability insurance to enjoy financial protection from such lawsuits.
Insuranceopedia Explains Product Liability
An individual who sustains an injury due to a defective or unsafe product has a right to take legal action against the designer, manufacturer, or vendor. Although manufacturers take steps to avoid defects, unsafe products sometimes reach the market. Those involved in any part of the product design and vending process may benefit from product liability insurance as product liability litigation has grown. It is reflected in consumer law shifting from buyer beware to strict liability for parties involved in the production and selling of goods.