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 Connecticut, businesses involved in the manufacturing, selling, or distribution of products are advised to consider product liability insurance as a safeguard against potential lawsuits. Product liability refers to the legal responsibility that these businesses may bear if their products cause injury or property damage. The state's laws allow for claims based on various theories of liability, such as design defects, marketing defects (including failure to warn), and manufacturing defects. Product liability insurance can provide coverage for legal fees, settlements, and court judgments. While not mandated by law, this type of insurance is a prudent investment for businesses to protect their financial interests, especially given that Connecticut's product liability statutes (such as the Connecticut Product Liability Act) can impose significant damages for proven claims. The construction industry, in particular, recognizes the importance of this insurance due to the high risks associated with construction materials and equipment.