AdvisorSmith evaluated financial strength, customer satisfaction, ease-of-use, and more to find the best product liability insurance providers.
Product liability insurance is a key coverage for any company involved in manufacturing, distributing, or selling goods and products. If one of your products fails and causes bodily injury or property damage, you could be sued. Product liability insurance can provide support to protect you from the major legal costs and financial losses that could result from product claims.
AdvisorSmith looked at a number of online brokers and insurers to determine the top providers of product liability insurance. We reviewed financial strength ratings from AM Best and Standard & Poor’s, available features and options, customer satisfaction survey data, and website ease-of-use. We scored companies out of a total of five points and, while we considered a number of providers, we only included those companies that scored 4.5 or higher.
The Best Product Liability Insurance Companies
|1||Chubb||5.0 / 5.0|
|2||The Hartford||4.9 / 5.0|
|3||The Hanover Insurance Group||4.7 / 5.0|
|4||RLI||4.5 / 5.0|
|5||Great American||4.5 / 5.0|
*Not all insurance companies provide coverage in all states.
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More on the Best Product Liability Insurers
5.0 / 5.0
Chubb is a large insurance company with an A++ rating from AM Best and an AA rating from Standard & Poor’s, indicating a high level of financial strength. Chubb’s product liability insurance programs are customizable and can be tailored to fit many industries. The insurer offers a coordinated claims process, provides consulting services to reduce the likelihood of incidents, and can help manage long-term exposures such as asbestos.
In addition to product liability coverage, Chubb offers preventative consulting services that can help businesses increase safety and reduce the chance of accidents. Auditing services, best practices development, product safety services, studies, and reviews are available to insureds.
4.9 / 5.0
The Hartford has been given an A+ rating by both AM Best and Standard & Poor’s. The company offers liability coverage to companies in many industries, including those with a higher level of liability risks, such as manufacturers, wholesalers, distributors, and importers. The Hartford offers risk engineering consulting services that can provide guidance to help reduce risks.
The Hanover Insurance Group
4.7 / 5.0
The Hanover Insurance Group is one of the largest insurance groups in the U.S., with an A rating from both AM Best and Standard & Poor’s. The Hanover offers a variety of commercial insurance products tailored for small and midsize businesses, including product liability, general liability, and business owner’s policies. The Hanover offers its products through a select network of preferred agents and brokers who can also provide guidance and assistance.
4.5 / 5.0
RLI has a rating of A+ from both AM Best and Standard & Poor’s. RLI is a specialty insurance provider that focuses on property and casualty insurance and surety bonds, including products for underserved markets and niche insurance needs.
RLI’s product liability insurance covers many exposures, including difficult, specialized, or niche risks. The insurer will issue policies within 15 days and offers customized self-insured retention and large deductible programs for product liability policies. Special programs are available for companies dealing with auto parts, cosmetics, and medical equipment.
4.5 / 5.0
Great American received A+ ratings from both AM Best and Standard & Poor’s, indicating a high level of financial stability. Founded in 1872, Great American is a subsidiary of American Financial Group, a Fortune 500 company.
The insurer provides product liability coverage for many product-focused companies, including manufacturers, distributors, and importers of auto parts, cosmetics, toys, electrical equipment, agricultural equipment, and more. Policies are available on a claims-made or occurrence basis and discontinued products liability coverage is available.
Brokers for Product Liability Insurance
Product liability insurance is commonly included as part of general liability coverage, or it can be purchased on a standalone basis for companies with higher product risks. For small business owners, it can help to work with a trusted broker who understands your industry and the risks of your particular product. Brokers can work to get you quotes from a variety of insurers who provide policies that fit your business’s needs. Below, we’ve highlighted a few of the top brokers that offer product liability insurance.
CoverageSmith is a leading online broker specializing in insurance for small businesses. The company provides a modern, tech-enabled solution for businesses, allowing them to quickly get the insurance they need, completely online, from some of the most trusted insurance carriers in the world, including Chubb, The Hartford, AIG, and CNA.
CoverWallet is an online broker backed by Aon, an insurer with an A rating from AM Best. The company provides online quotes, assessments to help you understand what types of insurance your business needs, and online claims processes. CoverWallet also provides information about product liability claims and coverage.
CoverWallet uses a customized application and algorithms to help you get the insurance you need without irrelevant questions. The company also provides resources to help businesses understand the risks they may face.
Embroker is an online broker offering online quotes, online claims, and 24-hour assistance via chat, email, or phone. A personal account manager can help with insurance needs and assist you in getting the right product liability insurance for your business. Embroker does not require you to provide equity, ownership, or financial statements, making it simple to apply for coverage. Policies can be tailored to individual needs, with the option to choose your own deductibles and limits.
Embroker is backed by Munich Re, a financially strong insurer with an A+ rating from AM Best and an AA- rating from Standard & Poor’s.
How much does product liability insurance cost?
AdvisorSmith found that the average cost of product liability insurance for small businesses was $1,192 per year. This cost survey included small businesses in the manufacturing, retail, and wholesale industries with revenue under $1 million, for general liability coverage of $1 million per occurrence / $2 million per year.
Pricing does, however, vary depending on a number of factors, including:
- Industry. Businesses that operate in high-risk industries, like pharmaceuticals, can expect to pay more in premiums.
- Product. Businesses that develop high-risk products, like insecticides or firearms, can expect to pay more in premiums.
- Annual sales. The more product you sell, the more risk exposure your company faces, resulting in higher premiums.
- Business role in product stream. Depending on where your business sits in the overall stream of commerce, you may be at higher risk for liability. Manufacturers will generally have higher premiums than a company further down the supply chain.
- Claims history. As with most insurance policies, a history of frequent claims will inevitably increase your premiums.
- Coverage limits. The higher your coverage limits are, the more you’ll pay in premiums.
What does product liability insurance cover?
Product liability insurance is a form of general liability insurance meant to protect your business from financial and legal consequences as a result of bodily injury or property damage due to the use of your business’s sold goods or products. Product liability insurance covers the legal and court costs of defending any claims of bodily injury, property damage, or financial losses caused by your product.
A few common types of claims that product liability insurance can protect against include:
- Design defects. A design defect claim alleges that a product was unsafe or dangerous from the conception of its design. This differs from a production or manufacturing flaw in that the cause for harm was not born out of faulty craftsmanship or production, but the product’s inherent design was dangerous in and of itself.
- Production or manufacturing flaws. Production or manufacturing flaw claims allege a mistake in the production or manufacturing of merchandise that created a dangerous or unsafe product. Production or manufacturing flaws are any mistakes that occur during the production of the product that creates a potential cause for bodily injury, property damage, or consequential economic loss.
- Misleading or defective warnings or instructions. A customer may seek action against your company for not supplying the necessary warnings regarding dangerous aspects of your product. The claim here is that a company did not adequately and appropriately notify the consumer of all the potential obvious risks and harm that the product may cause.
- Strict liability. Strict liability allows for a customer to hold a company responsible if they can prove a number of reasonable claims, even if it was not the company’s direct intention to harm the customer or impart any injury or damage. In such a case, the company must bear the responsibility of a defective product, despite the company’s negligence or intent to harm.
In order to determine the best product liability insurance companies, AdvisorSmith considered a number of factors that reflect an insurer’s financial strength, customer satisfaction, and ease-of-use. Using our own proprietary scoring algorithm, we weighted the various factors based upon what we believe to be important for small and midsize business owners. These factors included carrier ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, an evaluation of each insurer’s policies, options, and website features, and more. Our algorithm outputted a score out of five total points. While we considered a number of insurers, we only included in this article those companies that scored 4.5 or higher.
The AdvisorSmith rankings are based upon our editorial team’s quantitative and qualitative analysis, and they are intended to serve only as a guide for our readers. We encourage our readers to conduct their own research when selecting an insurer, shop and compare quotes, and make a decision based on their own unique business needs.
AdvisorSmith is in no way compensated for any of our reviews.