Product liability insurance is one of the few insurance languages that is being banded around with little understanding of the basics. Most people erroneously think that product liability is only meant for manufacturers of products or goods. If you want to read more facts and details about this insurance policy, visit this: www.products-liability-insurance.com
The truth is product liability insurance is designed for the full chain in the retail businesses; any company that has come in contact with the product. For instance, a Chinese company can simply manufacture a product for another company that will place its brand name on it, and that company can also give it to a wholesaler to help distribute to the end users through a retailer.
Now imagine, if a wholesaler receives about 500 of these products, let’s say refrigerators, and give about 300 of it to some retailers, who in turn sells to various buyers. The customer in turn powers this new refrigerator, and leaves it on over the night, but the refrigerator catches fire in the middle of the night and damages the entire property of the buyer. In this case, every link in the supply chain is liable, and as the wholesaler you will also be liable.
The product liability insurance is therefore, to protect you from the financial liability that may arise when a buyer suffers a loss or damage while using products or goods. As a wholesaler, this insurance will offer you coverage both legally and financially against claims and compensation.
Although, the manufacturer and the retailer will also share part of the financial obligations, it is, however, better than every link in the chain protects its own business from liabilities and risks.