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 Dakota, as in other states, businesses involved in the manufacturing, distribution, or sale of products can be held liable for damages under product liability law if their products cause injury or property damage. This liability can arise from various legal theories, including design defects, marketing defects (such as failure to warn), and manufacturing defects. To mitigate the financial risks associated with these potential liabilities, businesses often purchase product liability insurance. This insurance is designed to cover the costs of legal defense and any damages awarded if the business is found liable in a product liability claim. It is important for businesses at any point in the product supply chain, including those in the construction industry, to consider such insurance to protect their financial interests in the event of a claim alleging that a product was defective and caused harm.