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 North Dakota, as in other states, businesses involved in the manufacturing, distribution, or retail of products may be held liable for damages under product liability law if their products cause injury or property damage. Product liability claims can be based on design defects, manufacturing defects, or marketing defects (including failure to warn). To mitigate the financial risks associated with such claims, businesses often purchase product liability insurance. This insurance provides coverage for legal fees, settlements, and court-awarded damages. While not legally required, product liability insurance is a prudent investment for businesses to protect their financial interests in the event of a lawsuit. The coverage is also relevant for those in the construction industry, where claims may arise from the use of defective materials or products in construction projects. It's important for businesses to work with an attorney to understand the specific risks associated with their products and to ensure that their insurance coverage adequately addresses those risks.