Product liability insurance protects your business against claims that a product it supplied caused injury or damage. It responds when someone is harmed, or their property is damaged, by a defect in a product your business made, imported, distributed, or sold. The exposure does not end when the product leaves your hands, which is what makes it different from the liability you carry on your own premises. We structure product liability cover around what your business puts into the market.
What product liability insurance covers
Product liability cover responds to a third party's claim that a product was defective and caused them bodily injury or damage to their property. It meets the compensation and the cost of defending the claim, within the policy limit. A defect can take more than one form: a flaw in the design, a fault introduced in manufacturing, or inadequate instructions and warnings that make an otherwise sound product unsafe in use. The claim can arise long after the sale, once the product is in the hands of a customer.
Public liability and product liability are not the same
This is a common and costly assumption. Public liability cover responds to injury or damage arising from your operations or on your premises, while a customer is dealing with you. Product liability responds to injury or damage caused by the product itself, often after it has left your premises entirely. A business can hold public liability cover and still have no protection when a product it sold injures someone at home. The two are frequently arranged together for that reason, but one should never be assumed to include the other.
Who can be held liable
A point many businesses underestimate is how far liability reaches along the supply chain. A consumer harmed by a defective product can pursue the manufacturer, the importer, the distributor, and the retailer, depending on how the defect arose. This matters in particular for businesses that import and distribute goods made elsewhere: a Singapore importer can be held liable for a defect it did not create, simply by being the party that brought the product into the market. Relying on an overseas manufacturer to answer a claim is rarely a safe assumption.
The legal backdrop in Singapore
Two routes commonly underlie a product claim. Under the Consumer Protection (Fair Trading) Act, consumers have rights in respect of goods that do not conform to contract, and where a defect appears within six months of delivery it is presumed to have existed at delivery unless the supplier proves otherwise. Separately, under the tort of negligence, an injured person can sue the manufacturer or distributor directly, without any contract between them, and can claim for personal injury. Certain goods also carry specific safety and reporting obligations, such as those for controlled goods under consumer-safety regulations and for health products and vehicles under their own Acts.
Who should consider it
Product liability cover is relevant to any business that makes, imports, distributes, brands, or sells physical goods: manufacturers, importers and distributors, wholesalers and retailers, and food and beverage businesses whose products are consumed. The exposure rises with the volume supplied, the nature of the product, and how directly it is used by or around people. Businesses that import goods for the local market should be particularly aware that the liability can rest with them.
Where the exposure sits
The decisions that matter are the limit, the products disclosed, and the territory. A limit set without regard to the harm a defective product could cause across many units can be inadequate to a serious claim. Cover responds to the products the insurer was told about, so a new product line or a change in what you supply needs to be disclosed. Where products are exported, the territory and jurisdiction the policy covers also matter, since a claim may be brought abroad. Reviewing the limit, the range of products covered, and the territorial scope is where the protection is decided.
How we structure it
We take time to understand what your business makes or supplies, where those products go, and how they are used, and we place cover with our appointed insurers around that. We make sure your product range and markets are properly disclosed, set the limit against a realistic view of a serious claim, and review both as your products and markets change. We remain your point of contact if a claim is made. The aim is cover that reflects what your business actually puts into the market.