Glossary

Product liability

A manufacturer's, distributor's or seller's legal responsibility for injury or damage caused by a defective or unreasonably dangerous product.

Also called: products liability, product liability claim, strict liability, product defect liability

Product liability is the body of law that makes businesses answer when a product hurts someone or damages property. Claimants usually plead strict liability, negligence and breach of warranty together. Under strict liability the plaintiff need not prove carelessness, only that the product was defective when it left the defendant's control and the defect caused the harm. The three classic defects are in manufacturing, in design, and in warnings or instructions. Liability can reach every link in the chain of distribution, so retailers and importers are often named with the maker.

On the insurance side, the ISO commercial general liability form, CG 00 01, covers these claims through the products-completed operations hazard: bodily injury or property damage away from your premises that arises out of your product after you have given up possession of it. That hazard has its own annual cap, the products-completed operations aggregate. A reseller often asks the manufacturer for vendors coverage, ISO CG 20 15.

Know the gaps. The form excludes the cost of recalling a product and damage to the product itself, which is why product recall insurance exists. And a business that retires a product line still faces injuries that surface later, so it should keep coverage or buy discontinued products cover. The guide on product liability insurance for makers, sellers and importers covers makers, sellers and importers.

Last reviewed October 10, 2026

In the index now

Related terms

Products-completed operations aggregate The most a general liability policy pays per policy period for injury or damage in the products-completed operations hazard, apart from the general aggregate. Completed operations Liability coverage for injury or damage that occurs after a contractor or service provider finishes a job and leaves, arising out of the finished work. Commercial general liability (CGL) The standard business policy for claims that your operations, premises or products injured someone or damaged property, usually on ISO form CG 00 01. Bodily injury Physical injury, sickness or disease suffered by a person, including death resulting from it; the harm that triggers liability coverage for injuries. Property damage In liability policies, physical injury to tangible property including its loss of use, or loss of use of tangible property that was not physically injured.

Related guides

Insuring a cannabis business: why coverage is hard to find Federal prohibition, banking rules and reinsurance limits keep most cannabis cover in the surplus lines market. Where rescheduling stands in October 2026. Home-based business insurance: why a homeowners policy falls short A homeowners policy caps business property, excludes business liability and ignores lost income. Endorsement, in-home policy and BOP options, and other needs. PFAS "forever chemicals" and liability insurance: exclusions and gaps Insurers now attach PFAS exclusions on top of the pollution exclusion. What the policies say, how older coverage fits, and what to check at renewal. Product liability insurance for makers, sellers and importers How product liability coverage works for makers, distributors, retailers and importers: what the CGL pays, what it excludes, and where vendors endorsements fit. Product liability vs professional liability Product liability covers injury or damage from what you sold; professional liability covers financial loss from your advice or services. Where they overlap. Product recall insurance Product recall insurance pays the cost of pulling a product, which the CGL excludes. How triggers work, what it covers and excludes, and what underwriters want.

Related insurers

Chubb Global insurer and the No. 1 U.S. writer of business liability coverage. A++ rated, with Westchester for E&S and online quotes for small firms. ProAssurance Birmingham-based medical malpractice, med-tech products and workers' comp insurer, owned by The Doctors Company since June 2026 after a $1.3 billion takeover. W. R. Berkley Greenwich, Conn., insurer running about 60 specialized units in E&S, specialty, regional and workers' comp lines, sold through agents, brokers and wholesalers.

Related industries

Bakery insurance Insurance for retail and wholesale bakeries: GL and product liability for allergens, oven and mixer breakdown, spoilage, delivery vehicles and workers' comp. Brewery, winery and distillery insurance Insurance for craft breweries, wineries and distilleries: product liability and recall, taproom liquor liability, stock and spoilage, fire, and federal bonds. Cannabis business insurance Why cannabis insurance sits mostly in the surplus lines market, what state regulators require, and the federal rescheduling status as of October 2026. Catering insurance Insurance for caterers: GL with food liability, host liquor and venue requirements, delivery auto, equipment cover and event exposures. Coffee shop insurance What coffee shops and cafes need: GL with hot-beverage claims, property and equipment breakdown, spoilage, comp, and roasting or wholesale add-ons. E-commerce business insurance Product liability, marketplace insurance requirements, stock at fulfillment centers, cyber and shipping losses for online sellers.

Related en español

Cobertura de productos y operaciones terminadas Qué cubre el riesgo de productos y operaciones terminadas en la póliza CGL, cuándo un trabajo se da por terminado, su agregado propio y cómo mantenerla vigente.