Case Study: How Product Liability Insurance Can Protect Manufacturers

By Axis Marketing

bottle products on a table

Your customers expect you to have safe and reliable products, and failing to meet these expectations can lead to huge financial losses. If one of your products harms a customer or other stakeholder in any way, they can sue your business, leading to costly legal fees and settlements that can easily reach six figures.

Take a look at the following case study on how Product Liability Insurance was able to protect a company when they suffered a product recall:


The company: A food manufacturer specializing in the sale and distribution of spices.


The challenge:

An international distributor of spices became the target of a mass recall after several of their products were contaminated with a peanut protein. Many consumers suffered allergic reactions, which led to claims in multiple jurisdictions.

Companies that import products, including raw ingredients that are later provided to manufacturers of final products, face serious liabilities if the imported product does not meet safety standards. In the case of the peanut allergen, the company caused serious injuries and illness to their customers and did not include required labels, warnings and instructions due to the accidental nature of the contamination


Product liability insurance in action:

In product manufacturing, a variety of things can go wrong throughout the production and distribution process. Product liability insurance provides protection against a variety of unforeseen circumstances.

In the example above, product liability insurance responds directly to the manufacturing and labelling defect, providing coverage for claims related to consumer injury and illness. It should be noted that not all product liability policies help organizations recoup the costs of a full-scale recall. As such, it’s important to review policy language with a qualified insurance broker.



Find Out More:

While you may do everything in your power to ensure your products are safe, mishaps can still occur without warning.

That’s why, to protect against claims and ensure the longevity of your business, you need product liability insurance.

Download a copy of our “Coverage in Action: Product Liability Insurance” guide to see how these policies can support and protect your business:

Download Here


Tags: Manufacturing

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