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 South Carolina, businesses involved in the manufacturing, selling, or distribution of products should consider obtaining product liability insurance as a safeguard against potential lawsuits. Product liability refers to the legal responsibility that these businesses may bear if their products cause injury or property damage. Claims can arise from various issues, such as design defects, marketing defects (including failure to warn about potential risks), or manufacturing defects. While product liability insurance is not mandated by law, it provides critical financial protection for businesses against the costs associated with defending a product liability lawsuit and any resulting judgments or settlements. This type of insurance is particularly relevant for those in the construction industry, where the use of potentially defective products can have significant safety implications. Without such insurance, a business may face substantial financial burdens if held liable for damages resulting from a defective product.