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Product Liability

According to us and other insurance experts, if you make or handle a product, this is most likely your biggest risk. In the event of someone bringing litigation towards a product, everyone is involved. It’s what we call “sueing up the chain”, meaning every company that help create and/or handle the product gets served with litigation documents. Then it’s up to the judge and jury to determine where the fault lies. This opens the door for product liability and protecting your company from litigation and costs to remove the product from the market place.

 

How does it work?

In the event of a consumer having an unwanted reaction and bringing litigation towards the party responsible, this coverage will help protect any final monetary judgement and your duty to defend, meaning attorney/court fees along with the cost of removing a product off the market place. Let’s look at this from 3 different angles; Grower, Infuser, and distributor/retail.

A company grows their product and sells a very large amount of it to many industries every day. One of those buyers is an infuser and they make pills to help with childhood seizures. The infuser then offers these pills to a retailer to help package and sell on the market. Then unbeknownst to anyone, one of these pills kills a small child. How? Maybe it altered the child’s mind in a way that put them in harm. Maybe the infuser put something in the pill that they shouldn’t have. Maybe the grower was unaware of something that got into the plant or the strain itself. The one thing we do know, is that it doesn’t matter, a child is dead and the parents are seeking restitution from everyone up the chain. It may not be the retailer, infuser, or the growers fault but they still have to spend a lot of money on litigation costs, product research, or even possibly halting their operation for a time being. And in the event of one being at fault, someone has to eventually pay and possibly replace that product. This is a loss that can be reimbursed.

 

How do you get reimbursed?

In the event of litigation costs, this coverage will reimburse your attorney fees, court costs, and possible loss of business income. Also, in the event your company was found guilty, this coverage will cover the cost of the final settlement and even the cost of product withdrawal off the market.

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