Warranties

What Does Warranties Mean?

Warranties are assurances from a company that its products will perform as promised and that all relevant codes and regulations were adhered to during manufacturing. These warranties are important for product liability insurance. If a company fails to meet the guarantees specified in the warranty, it can void the warranty and have its claim denied.

Insuranceopedia Explains Warranties

Problems can arise in product liability insurance if a company fails to honor its warranty. For instance, a product liability insurance policy for a steel beam manufacturer may only cover products that meet the specifications outlined in the warranty. If the warranty states that all steel beams must weigh at least 200 pounds, the insurer may refuse to reimburse a claim related to a beam weighing 150 pounds. Because warranties tie directly into how a business’s coverage responds to defective product claims, manufacturers often pair their product liability policy with broader general liability insurance to handle bodily injury or property damage claims that fall outside the warranty’s terms. Companies weighing how warranty language interacts with their coverage usually start by reviewing what their business insurance policy actually covers, since the wording of a warranty can decide whether a claim gets paid.