Product Liability Insurance

Manufacturers/Distributors/Installers/Importers of Sports & Recreation Equipment

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We specialize in start-up companies.

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Manufacturers, Fabricators, Distributors, Installers, and Importers of Sports and Recreation Equipment – Save up to 38% on specialized insurance coverage by SADLER

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We Will Out-Protect, Out-Think, and Outwork Our Competition in Order to Provide You with the Best Insurance and Non-Insurance Protection Program at the Lowest Possible Cost!

Product Liability Insurance is an effective way of transferring the risk of a lawsuit away from sports and recreation equipment manufacturers, distributors, suppliers, importers and retailers. When a piece of sports or recreational equipment causes bodily injury or property damage and results in a product liability lawsuit, all parties in the supply chain can find themselves named in the lawsuit. A Product Liability insurance policy pays for the cost of legal defense as well as settlements or adverse jury verdicts.

• Once we place your Product Liability, we can also handle all of your other coverages such as Workers’ Compensation, Business Auto, Umbrella, Property, Crime, etc. so there is no need for you to deal with more than one insurance agent.
• Our current clients pay premiums ranging from $5,000 to more than $1,000,000, so there is no account too small or too large for our expertise. We provide our professional risk management services to even the smallest accounts. (We know that they often grow into very large accounts.)
• Our exclusive risk management audits will reveal the dangerous omissions and loopholes in your current insurance program that expose you to unacceptable risks from uncovered lawsuits and property losses. This simple process allows you to have peace of mind so you can concentrate on running your business.
• We can review your contracts with landlords, equipment lessors, trade associations, customers, suppliers, employee handbooks, etc. in order to contractually shift the risk of liability or property loss to the other party whenever feasible. This important service is not rendered by most insurance agents and allows you to better protect your insurance loss record, which can result in lower premiums.

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6 Steps To Reduce Your Company’s Product Liability Risk

Step #1:  Design with safety in mind

It’s important to understand not only the designed use of your product, but also any alternative uses of your product before selling it to the public. Once you become aware of alternative uses of your products, you should develop warnings and disclaimers addressing these alternative uses. Simply ignoring the alternative uses of a product will not protect the business if it’s named in a product liability lawsuit. Also, both understanding and meeting government and industry standards are a must. In addition, labels, warnings and instructions are considered to be part of your product, so they must be carefully drafted.

Step #2:  Understand that if you import goods into the U.S., the insurance carriers and the courts will treat you as the manufacturer

Simply put, bringing product liability lawsuits in foreign countries is typically not productive as their laws make it difficult for an injured claimant to prove damages and collect. Therefore, product liability lawsuits typically will be filed in the US against the U.S.-based importer. Since the foreign manufacturer is not a viable deep-pocket target, the U.S. based importer bears the same risks as the manufacturer. As a result, U.S.-based importers will usually be charged a higher Product Liability rate, as if they were a manufacturer.

Step #3:  Transfer as much risk as possible to suppliers through formal documents

• Use only suppliers that you know have a Product Liability Policy. The only way to know this is to collect Certificates of Insurance from all suppliers. A Certificate of Insurance is a document that simply shows your suppliers have insurance and what limits of liability they carry.

• Ask all of your suppliers to name your business as an additional insured on their General Liability and Product Liability policies. This allows your business to transfer all product liability claims involving their products to their General and Product Liability Insurance carrier. In other words, if you are additionally insured on their policy, their policy will be primary and your policy becomes secondary.

• Use indemnifications/hold harmless agreements, when applicable. This contractual transfer technique further clarifies that your suppliers are to assume the risks of product injury under most circumstances.

 Step #4:  Keep detailed records

Establish sound documentation policies to meet business goals and meet regulatory requirements. This will allow you to prepare for the possibility of future product liability claims.

For manufacturers and those that outsource manufacturing to foreign countries, keep copies of customer design specs and product orders. This should include sign off on final designs and an engineering change-order system to retain any changes and provide a clear and detailed reason for the changes.

You should have written steps and procedures chronicling the product flow through the manufacturing steps and quality control process. Retain the documentation to assure the quality and conformity of each of the quality control steps.

Establish a documentation retention policy to make sure documents that may be important to an investigation or defense of a product liability claim is preserved. There are guidelines for knowing how long to retain such documentation.

Step #5:  Have a plan for capturing customer feedback

Make it as easy as possible for consumers to share their complaints and concerns. You should have a system to collect and review this information. This helps to identify trends that could have serious long-term consequences to your company and defective or faulty products that could lead to product recalls, product liability claims and high-profile negative publicity.

Step #6: Understanding Why Children’s Products Are Different

Importers and distributors of sports and recreational equipment often overlook the fact that when children use their products, there is a higher risk or exposure for the business and the insurance carrier that provides your Product Liability Insurance. Most important is that the statute of limitations is different for children than for adults. In most states, adults typically have two to three years to bring a product liability lawsuit after the date of an injury. However, children typically have until their 18^th to 21^st birthday to bring a lawsuit. And product disclaimers and waivers have little or no impact on reducing claims, judgments or settlements on children’s claims.

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Speciality Areas for Products Liability Insurance Coverage

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