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 Oregon, businesses involved in the manufacturing, selling, or distribution of products should consider purchasing product liability insurance as a safeguard against potential lawsuits arising from product-related injuries or property damage. This type of insurance is designed to cover the costs associated with defending against claims of product liability, which can be based on various legal theories such as design defects, marketing defects (including failure to warn), or manufacturing defects. Oregon law, similar to other states, allows for individuals to seek compensation for damages caused by defective products, and any party in the product supply chain can be held liable. This includes manufacturers, distributors, and retailers. In the construction industry, contractors, suppliers, and manufacturers often obtain product liability insurance to protect against claims of defective products used in construction projects. While product liability insurance is not mandated by law, it is a prudent measure for businesses to mitigate financial risks associated with product liability claims.