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 Hawaii, businesses involved in the manufacturing, selling, or distribution of products should consider obtaining product liability insurance as a safeguard against potential lawsuits arising from product-related injuries or property damage. Hawaii's product liability laws allow for legal action based on various theories, including design defects, marketing defects (failure to warn), and manufacturing defects. These laws apply to all entities in the product supply chain, from manufacturers to retailers. Product liability insurance can provide coverage for legal fees, settlements, and judgments related to such claims. Additionally, in the construction industry, manufacturers, suppliers, and contractors often secure this type of insurance to protect against claims of defective products used in construction projects. While insurance can mitigate financial risks, it does not absolve a business from adhering to safety standards and regulations aimed at preventing defective products from entering the market.