Product Liability Insurance
The sentiment “they don’t make them like they used to” is only partially true. Thanks to the proliferation of advanced technology, improved safety standards, and scrutiny from government agencies, the products we use daily have become safer.
Yet still, every product you design, manufacture, or sell carries a level of risk. At KASE Insurance, we understand the liabilities associated with designing and selling products, and the repercussions that may arise if they harm the public. That’s why our brokerage is dedicated to protecting manufacturing, retail, and distribution companies with essential products liability insurance coverage in Ontario.
Protect your business and stay compliant with KASE Insurance.
What is Product Liability Insurance?
Product liability insurance, also known as product insurance or products liability coverage, protects businesses against consumer claims of injury or damage caused by the products they make, sell, or distribute.
It protects against legal expenses, settlements, and potential compensation for third-party claims. For Canadian businesses, especially in manufacturing and retail sectors, this coverage is essential for managing product-related risks and maintaining customer trust.
Why Do You Need Product Liability Insurance?
Even with strict quality control, product defects can still happen. Product liability insurance ensures your business is financially protected when the unexpected occurs.
Financial Protection
It provides coverage for legal fees, settlements, and other costs without you paying out of pocket.
Risk Management
Product liability insurance offers coverage against defects, advertising injury, and third-party claims to minimize your risk
Provincial Compliance
Although not mandatory, some commercial suppliers and partner companies may require you to hold product liability coverage as part of their agreements.
Peace of Mind
If your product inadvertently causes injury or damage, rest assured that you won’t have to assume responsibility or pay significant out-of-pocket expenses.
What Does Product Liability Insurance Cover?
Insurance for product liability protects against a wide range of legal costs and damages that could strain your business. They include the likes of:
- Manufacturing Defects: Covers claims resulting from design or production flaws that cause harm or damage once the product is in use.
- Improper Labelling or Instructions: Covers losses from missing warnings, incorrect directions, or misleading information that lead to consumer injury.
- Design Errors: Protects your business if a product’s design inherently poses a safety risk or fails to perform as intended.
- Property Damage: Provides coverage if your product causes accidental damage to another person’s property during normal use.
- Bodily Injury: Covers medical and legal expenses if a customer is injured using your product.
- Product Recall Costs: Helps cover expenses for notifying customers and replacing or repairing defective products.
- Legal Defence Costs: Covers lawyer fees, court expenses, and settlements.
Product liability insurance also provides coverage for costs associated with recalls and food poisoning or foodborne illnesses, but excludes certain types of claims, such as intentional misconduct and punitive damages. That said, KASE Insurance helps you find insurance for product liability that covers your needs, as well as adjacent policy types that cover gaps.
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Product Liability Insurance Exclusions
While product liability insurance is comprehensive, certain situations are not covered.
- Product warranties or guarantees
- Intentional misconduct or fraudulent claims
- Known defects not corrected or disclosed
- Employee injuries (covered under workers’ compensation)
- Loss of market value or recall due to poor performance
Complete Business Insurance Coverage for Canadian Companies
Product manufacturers, online retailers, or any business selling products can cover significant amounts of liability with product insurance. However, like other policy types, it has limitations. For a more robust protection, KASE Insurance offers complementary coverages that protect manufacturers, distributors, and retailers from operational, financial, and reputational risks.
Commercial General Liability Insurance (CGL)
Commercial general liability insurance covers third-party injuries that occur due to other reasons besides product misuse or failures, such as slip-and-fall accidents at your retail location.
Commercial Property Insurance
Covers your building, equipment, inventory, and materials against fire, theft, or natural disasters, ensuring minimal downtime and asset loss.
Product Recall Insurance
Provides coverage for the costs of recalling defective or contaminated products, including shipping, communication, and disposal expenses.
Cyber Insurance
A cyber liability insurance policy offers protection against data breaches, which is useful if your product collects user data (which can be hacked and breached).
Pollution Liability Insurance
Essential for manufacturers, this covers cleanup and third-party damages resulting from accidental pollution, emissions, or chemical spills.
Commercial Auto & Cargo Insurance
Covers company vehicles and goods in transit against theft, collision, or damage—vital for manufacturers, wholesalers, and distributors.
Business Interruption Insurance
Reimburses lost income and fixed expenses if your operations are disrupted due to an insured event such as a fire or supply chain damage.
Umbrella Liability Insurance
Extends your existing liability limits to provide an additional layer of financial protection against large or unexpected claims.
Who Needs Product Liability Insurance?
Product liability insurance is designed for small businesses, medium and large enterprises, as well as startups that design, produce, or sell physical goods. Here are the common sectors that need this type of coverage to protect themselves from the potential repercussions of product mishaps.
- Manufacturers: Manufacturing companies require comprehensive, tailored protection against design and production-related injury or damage claims.
- Wholesalers & Distributors: Wholesalers should acquire adequate coverage for product defects originating from suppliers or manufacturers.
- Importers & Exporters: Essential for products sourced or sold internationally with varying safety standards.
- Consumer Electronics: Devices such as smartphones, tablets, and others come with overheating hazards and software flaws, which can cause harm or disturbances to users. Product liability insurance can provide protection for manufacturers of these devices.
- Food & Beverage Companies: Packaged foods and beverages may contain allergens due to accidental cross-contamination or cause injuries due to insufficient warnings. Product insurance liability is a must-have for the makers of these products in case their products inadvertently sicken or harm consumers.
- Cosmetic & Skincare Brands: Certain skincare products can trigger adverse reactions due to their ingredients or fail to properly warn customers of potential risks due to mislabelling. Makers and retailers of such products benefit from securing product liability coverage so as to protect themselves against consumer claims if they’re injured.
- Retailers & E-Commerce Businesses: Many online stores source products from third-party vendors, which carries the risk of them selling defective products. It’s therefore wise for e-commerce companies to seek insurance for product liability for their own protection.
Why Choose KASE Insurance for Product Liability Coverage?
At KASE Insurance, we specialize in helping Canadian businesses protect themselves from product-related risks with tailored product liability insurance solutions. With our team, you can expect:
- Tailored Policies: We partner with Canada’s top product liability insurance providers to design policies customized to your operations, product type, and distribution network—so you’re never over- or under-insured.
- Expertise in Manufacturing & Retail Risks: With extensive experience across manufacturing, retail, and distribution sectors, our team understands the unique liability exposures your business faces, helping you secure the right coverage for your products.
- Dedicated Claims & Risk Management Support: From policy setup to product liability claims resolution, our brokers provide hands-on guidance to minimize disruption and protect your business’s financial stability and reputation.
Don’t let product defects undermine your business efforts and reputation. Get in touch with KASE Insurance today for more information on product insurance liability cost details to secure the policy your business needs.
Schedule a no-commitment consultation with our team!
Read what clients have to say about KASE
By far the most professional and trustworthy insurance brokerage I have known. We have been working with this firm for number of years now and I have nothing but good to say about their team and services. Stan and his team won't stop until we are fully satisfied. They are always on top of things, super fast in their assistance and very professional. I highly recommend this firm to anyone seeking for great insurance brokerage to work with. Big Thank You to Stan and Kase Insurance for many many years of great service!
Reviewer: Alex K
out of 5 stars
Stan and is team at KASE Insurance have been fantastic in explaining what insurance we needed for our business. Very hands on approach and detailed. I work highly recommend KASE Insurance for any business owner looking for great service.
Reviewer: Kyle Grooms
5 out of 5 stars
The KASE team is very easy to work with. They answer your questions quickly, walk you through the process patiently, and find you great rates. We've been working with them for a few years and we haven't felt the need to shop elsewhere because of their customer service.
Reviewer: Sasha Boersma
5 out of 5 stars