If a business manufactures, sells, or distributes products, it may want to purchase product liability insurance to protect against loss due to liability for personal injuries and property damage alleged to have been suffered by someone who used or was affected by a product.

Any business in the product supply chain—a manufacturer, distributor, or retailer—may be sued on one or more legal theories generally known as product liability—including the defective design of a product (design defect); the defective marketing of a product (marketing defect or failure to warn); or the defective manufacturing of a product (manufacturing defect).

Product liability insurance is also purchased by manufacturers, suppliers, and contractors in the construction industry to protect against claims that a product used in a construction project was defective.

In Alaska, as in other states, businesses involved in the manufacturing, distribution, or retail of products may be held liable for damages if their products cause injury or property damage. This liability can arise from various legal theories, including design defects, marketing defects (such as failure to warn), or manufacturing defects. To mitigate the financial risks associated with these potential liabilities, businesses often purchase product liability insurance. This insurance is designed to cover the costs of legal defense and any damages awarded if the business is found liable in a product liability claim. Contractors in the construction industry also commonly obtain this type of insurance to protect against claims of defective products used in construction projects. While product liability insurance is not mandated by state law, it is a prudent investment for businesses to protect their financial interests against claims and lawsuits.