Product Liability Insurance

No, but California law is the reason to carry it anyway. California originated strict liability in tort for defective products in Greenman v. Yuba Power Products (1963), which means a claimant need not prove negligence, only that the product was defective and caused harm. Vandermark v. Ford extended that reach to retailers a year later. So a distributor or reseller who never touched the design can be named. Contracts do the rest: retailers, landlords, and marketplaces commonly require the coverage and additional insured status before they will carry you.

Only if the coverage territory says so, and the default is narrower than most sellers assume. A standard general liability form covers worldwide bodily injury and property damage but generally only where the suit is brought in the United States, its territories, or Canada. Sell into a market where a claimant can sue locally and the base form may not respond. A worldwide territory endorsement is what changes that, and it is a deliberate purchase. If you sell through an overseas distributor or a marketplace that ships abroad, tell us, because it changes the form we need.

No, and the two are commonly confused. Product liability responds to injury or damage a defective product causes to someone else. A recall is the cost of getting the product back: notifying customers, shipping, storage, disposal, replacement, and the lost income while it happens. That is product recall coverage, written separately and often with its own sublimit and waiting period. A business can face a recall with no injury claim at all, and the liability policy does not fund it. Retailer and marketplace agreements increasingly ask for both.

There is no single formula. The drivers are what the product is and how it can fail, how many units are in circulation and where they are sold, whether retailers or distributors require a limit and additional insured status as a condition of carrying you, and the claim severity typical of your product category. Volume matters because exposure scales with units in the market. Because those are specific to the product and the distribution, review your individual needs with a licensed agent or qualified advisor.

Product liability insurance typically does not cover intentional harm caused by a product, professional negligence, or employee injuries. Professional negligence usually needs professional liability insurance, and employee injuries go to workers’ compensation. Exclusions vary by form, so read yours for what it actually carves out.