Product Liability Insurance – Everything You Need To Know

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In the diverse and intricate world of the creative industries, every product is a manifestation of an artist's vision and hard work.

From handcrafted jewellery pieces that shimmer with individuality to unique art installations that provoke thought – the sheer variety is astounding. But with the thrill of creation comes the responsibility of ensuring that these products don't inadvertently harm or disappoint consumers.

That’s where product liability insurance can help, acting as a safety net for businesses and creatives alike.

What is Product Liability Insurance?

Product liability insurance protects businesses from claims related to the manufacture or sale of products, food, medicines or other goods to the public.

It covers the manufacturer's or seller's liability for losses or injuries to a buyer, user or bystander caused by a defect or malfunction of the product, and, in some instances, a defective design or a failure to warn.

In a world where consumers are more aware and active than ever before, businesses, particularly those in the creative industries, need to be proactive in safeguarding their interests.

Imagine a potter creating beautiful ceramic mugs that unfortunately contain a material causing them to crack when exposed to high temperatures. Or perhaps a sculptor designing an installation that, due to a design oversight, poses a risk to those interacting with it. In these scenarios, product liability insurance can help cover the costs of any claims.

How much does Product Liability Insurance cost?

The cost of this insurance is not a one-size-fits-all figure. Several factors can influence the price:

Type of Product

High-risk products, such as electrical equipment or children's toys, will generally cost more to insure than low-risk items like clothing or books.

Volume of Production

The more products you produce or sell, the higher the risk, and therefore, the cost.

Business History

A business with a track record of few or no claims may get lower premiums than one that has a history of claims.

Coverage Amount

How much cover you opt for will directly influence the cost of your premiums.

For creative professionals and artisans, it's vital to assess the potential risks associated with your craft or product and select an appropriate coverage level. For example, a jewellery-maker using non-standard materials might need a different coverage level than a painter selling prints of their artwork.

What does Product Liability Insurance cover?

Product Liability Insurance primarily covers three types of product defects:

  • Design defects: This pertains to inherent flaws in the design of the product. For instance, a chair designed in a way that makes it easily tip over.
  • Manufacturing defects: These occur during the production or manufacturing phase. Imagine a batch of handcrafted candles that, due to an error in the production process, emit harmful fumes when lit.
  • Marketing defects: This involves failures in instruction or a lack of warning labels. For instance, a paint used for art that needs ventilation when applied, but this isn't clearly mentioned on the packaging.

Besides these, product liability insurance can cover legal costs associated with defending any claims, even if the claim turns out to be groundless.

Do I need Product Liability Insurance in the UK?

In the UK, while it's not a legal requirement for every business to have Product Liability Insurance, it's highly recommended. The Consumer Protection Act 1987 holds producers or suppliers liable for damage caused by defective products. So, even if you didn't manufacture the product but only supplied it, you might still be held responsible if someone gets harmed.

For UK-based artisans, crafters and other creative professionals, this insurance becomes particularly vital, especially if you sell your creations to the public, either directly or through third-party retailers.

In the vibrant world of creative entrepreneurship, where every product tells a unique story, it's essential to ensure that the narrative remains positive and that mishaps don't overshadow the passion and effort that goes into each creation.

Product liability insurance, in this context, acts as a shield protecting your hard work and reputation against unforeseen adversities.

Written by

Luke Glassford

Marketing Director

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