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 Louisiana (LA), businesses involved in the manufacturing, selling, or distribution of products should consider purchasing product liability insurance as a safeguard against potential lawsuits. Louisiana's product liability laws allow for legal action to be taken against any party in the product supply chain, including manufacturers, distributors, and retailers, on the basis of various legal theories. These theories include design defects, where the product's design is inherently unsafe; marketing defects, also known as failure to warn, where the product's marketing fails to provide adequate safety warnings or instructions; and manufacturing defects, where errors made during the production process render a product unsafe. Product liability insurance can provide coverage for legal fees, settlements, and court-awarded damages in the event that a business is sued for such claims. This type of insurance is particularly relevant for those in the construction industry, where the use of potentially defective products can lead to significant liability issues.