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 Washington State, businesses involved in the manufacturing, selling, or distribution of products should consider obtaining product liability insurance as a safeguard against potential lawsuits. These lawsuits can arise from claims of personal injury or property damage caused by products that are alleged to be defective. The legal theories under which a business can be held liable include design defects, marketing defects (such as failure to provide adequate warnings or instructions), and manufacturing defects. Product liability insurance can provide coverage for legal fees, settlements, and court-awarded damages. This type of insurance is particularly relevant for those in the construction industry, where the use of potentially defective products can lead to significant liability. While product liability insurance is not mandated by Washington State law, it is a prudent measure for risk management and financial protection.