New York Product Liability Insurance

Yes. Absolutely. Even if you only sell or distribute products made by others, you can still be held liable when those products cause harm. New York courts recognize that everyone in the supply chain shares responsibility for product safety. It’s called chain of distribution liability.

Retailers? Liable. Wholesalers? Liable. Distributors and e-commerce sellers? Also liable. If a customer is injured, they often sue everyone involved in bringing that product to market. Product liability insurance protects you regardless of where the defect originated.

Under New York consumer protection laws, you can be named in a lawsuit even if you had no knowledge of the defect. Strict liability rules apply. This means injured parties don’t need to prove you were negligent. They only need to prove the product was defective and caused harm while you were part of the distribution chain.

Think about it this way: a customer buys a defective space heater from your retail store. The heater causes a fire. The customer sues the manufacturer, the distributor, and your store. Without product liability insurance, you’re paying legal defense costs out of pocket—even if the defect originated at the factory. Those costs average $50,000 to $150,000 before reaching settlement or trial.

This coverage is essential business insurance for any company touching products before end users, regardless of your role in manufacturing. Small business insurance packages should always include product liability protection if you sell physical goods.

Many Nevada businesses need both types of coverage. General liability insurance Nevada protects against slip-and-falls at your facility, advertising injury claims, and property damage from your operations. Product liability insurance protects against harm caused by products you manufactured, distributed, or sold.

Nevada insurance regulations don’t require most businesses to carry either coverage, but contractual requirements often mandate both. We help you determine which coverages protect your specific risks through comprehensive risk assessment and analysis of your business operations.

General liability insurance covers injuries and property damage that occur at your business location or during your business operations. Think slip-and-fall accidents at your store. Customer trips on your threshold. Delivery driver damages client property. These are general liability claims.

Product liability insurance specifically protects you when products you manufacture, sell, or distribute cause harm after leaving your premises. A customer uses your product at home. It malfunctions. They’re injured. That’s a product liability claim, not a general liability claim.

Different coverage. Different risks. Many businesses need both types of commercial insurance. Good news? Product liability coverage often comes included as part of a Commercial General Liability (CGL) policy under “products-completed operations” coverage. You’re not always buying two separate policies.

However, businesses with significant product liability exposure—manufacturers, wholesalers, importers—may need standalone product liability policies with higher coverage limits than a standard CGL provides. These standalone policies offer excess coverage over your general liability insurance base policy.

We help you understand which policies your New York business requires and find the right combination for complete protection. During risk assessment, we evaluate both premises-based risks (general liability) and product-based risks (product liability) to recommend appropriate business insurance coverage.

The key difference: location of the incident. On your premises or during operations? General liability. After the product leaves your control? Product liability.

No. Standard product liability insurance typically does not cover the costs of recalling defective products. This is a critical gap many business owners don’t realize exists. Recalls can be expensive. Very expensive. They involve customer notifications, product retrieval, disposal, replacement costs, and lost revenue during the recall period.

A typical product recall costs small businesses $500,000 to $2 million. Larger recalls easily reach $10 million or more. These costs include identifying affected products, notifying customers, managing returns, investigating the root cause, implementing corrective actions, and handling public relations.

Product liability insurance covers claims from injured parties after harm occurs. Product recall insurance covers the costs of retrieving products before harm occurs or worsens. Two different scenarios. Two different policies.

However, you can purchase separate product recall insurance to cover these costs. This specialized coverage is particularly important for food manufacturers, pharmaceutical companies, children’s product manufacturers, and any business where safety issues could require rapid market withdrawal.

We’ll review your risk factors during our risk assessment process and help you decide if recall coverage makes sense for your business and budget. Many manufacturers find the additional premium worthwhile given the financial devastation a recall can cause without insurance protection.

Consider this: would your business survive a $1 million recall expense? If the answer is “no” or “maybe not,” recall coverage deserves serious consideration as part of your comprehensive business insurance portfolio.

Getting a quote is simple. Call us at (440) 826-3676 or fill out our online contact form. We’ll ask about your business type, products you sell or manufacture, annual sales volume, current coverage (if any), claims history, and your coverage needs. The conversation takes about 15 minutes.

Within one business day, we’ll provide you with customized quotes from multiple insurance carriers. We don’t work for one insurance company. We work for you. This means we compare options across our network of commercial insurance providers to find you the best combination of coverage and price.

Our insurance brokers handle all the details. We explain your options in plain English. We highlight differences between policies. We help you choose the right coverage limits at the best price. No pressure. No confusion. Just clear guidance.

The underwriting process typically takes 3-5 business days once you select a policy and submit your application. Some businesses get approved immediately. Others with complex products or higher risk profiles may require additional underwriting review. We manage this process for you.

You’ll need basic information ready: business legal name, address, years in operation, detailed product descriptions, annual revenue, number of employees, current insurance information, and any claims history from the past five years. Having this ready speeds up the quote process.

New York businesses choose The Allen Thomas Group because we simplify the insurance claims process, provide ongoing policy support, and act as your advocate with insurance carriers. We’re here before, during, and after you purchase your policy.

Product liability insurance covers three main categories of product defects, each creating distinct liability exposures for New York businesses.

Design defects exist before manufacturing begins. The product design itself is inherently dangerous or flawed. Every unit produced shares this defect. Example: a ladder designed with a weight capacity too low for typical use. The design makes the entire product line unsafe, even if manufactured perfectly to specifications.

Manufacturing defects occur during production. The design is safe, but something goes wrong during manufacturing, affecting some units but not others. Example: a batch of bicycle helmets where the plastic didn’t cure properly, making those specific helmets weaker than designed. Only the defective batch poses danger.

Warning defects (also called failure to warn or marketing defects) happen when products lack adequate safety instructions, warnings, or labels. The product might be safe when used properly, but insufficient warnings lead to misuse and injury. Example: a cleaning chemical without proper warning labels about mixing with other substances.

Your product liability insurance covers bodily injury and property damage claims arising from all three defect types. Coverage includes design flaws, manufacturing errors, inadequate warnings, labeling failures, breach of warranty claims, and strict liability allegations.

The policy also covers failure to properly test products, insufficient quality control procedures, and failure to meet product safety standards. If someone alleges your product caused harm due to any defect or safety failure, your coverage responds.

Special situations also receive coverage: assembly errors, contamination issues, packaging defects that allow product degradation, counterfeit product claims (if you unknowingly sold counterfeit goods), and component part failures in products you assembled from various sources.

This comprehensive protection applies whether you’re the manufacturer, distributor, wholesaler, retailer, or any other party in the supply chain. New York consumer protection laws create broad liability exposure for all parties involved in bringing products to market.

Yes. E-commerce businesses need product liability insurance just as much as traditional brick-and-mortar retailers. Online selling doesn’t reduce your liability exposure. In some ways, it increases it.

When you sell products online, you’re responsible for items you ship to customers regardless of whether you manufactured them, purchased them wholesale, or dropship them from suppliers. If a product causes injury or property damage, customers can sue you under New York product liability laws—even if you never physically touched the inventory.

Many e-commerce platforms now require sellers to carry product liability insurance. Amazon, for example, requires certain sellers to maintain at least $1 million in commercial liability coverage including product liability protection. Shopify, Etsy, and other platforms increasingly implement similar requirements.

Online sales create additional risks traditional retailers don’t face. You’re selling across state lines, meaning potential claims under various states’ laws. You have less control over product inspection before shipping. Customer expectations for product quality remain high despite lower prices. Returns and exchanges become more complex.

Dropshipping presents unique challenges. You never physically handle products, but you’re still legally liable for defects. If your supplier sends a defective product that injures a customer, that customer can sue you, the supplier, and the manufacturer. Your business insurance should protect you regardless of your fulfillment model.

Small business insurance for e-commerce should include product liability coverage as a foundational element. Combine it with cyber liability insurance (for data breaches), general liability insurance (for non-product claims), and potentially errors and omissions coverage depending on what you sell.

The growth of online retail hasn’t reduced product liability risk. It has expanded it across geographic boundaries and created new exposure points. Insurance brokers specializing in e-commerce understand these unique risks and can structure appropriate coverage.