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 New York, businesses involved in the manufacturing, selling, or distribution of products are exposed to potential lawsuits under product liability law. These lawsuits can be based on various legal theories, including design defects, marketing defects (failure to warn), and manufacturing defects. Product liability insurance is a specialized type of insurance coverage designed to protect businesses from financial losses resulting from such claims. It covers the costs associated with legal defense, settlements, and any court-awarded damages. This insurance is crucial for any business in the product supply chain, including those in the construction industry, as they can be held liable if a product they produced or sold is found to be defective and causes injury or property damage. While not mandated by law, purchasing product liability insurance is a prudent practice for businesses to mitigate the risks associated with product-related claims.