Product liability insurance is a protective coverage needed by any business that refurbish products, manufacture products, sell products or import and distribute products from other countries.

There are are three types of product defects that the consumer is eligible to make a claim in the court.In product liability insurance terms, a product is any physical item that is sold or given away.

1.Manufacturing Defects which arises out of flaws in manufacturing process

2.Design Defects which arises out of of product design.

3.Information Defects which arises out of non communication of essential product information to the consumers.

It is advisable for the product manufacturers and distributore to have this insurance coverage.Otherwise, he has pay thousands of dollars for minor mistakes and flaws in the product.

This insurance protection pays for both legal fees and any compensation awarded in the suit.This is a fairly expensive form of insurance, because the potential payouts are very high.

As with most types of insurance coverage, manufacturers and merchants can be assured that they never have occasion to use their product liability coverage. But if a consumer files a legal action that is deemed reasonable and applicable by a court of law, the insurance will make it easy to settle the claim quickly.