The 6 Best Product Liability Insurance Companies for 2023

Thang Truong
Thang Truong
Updated on:

If you are a retailer or manufacturer, it’s possible that the product your company offers may cause damages to your customers and consumers. To protect you and your company from potential law suits, you need to have a product liability insurance policy. Below we’ll look at the top six companies on the small business insurance market that cover product liability in some way. In order to find out more in the online quote process where we could, we entered a hypothetical single location bakery with 2 employees and $100,000 in annual revenue in Wisconsin.   

The 6 Best Providers of Product Liability Insurance Companies

After comparing 12 different companies, we recommend the 6 best companies for you to consider a product liability insurance policy.

CoverWallet: Best for Comparing Online Quotes

CoverWallet is a digital broker specializing in business insurance. They partner with several leading business insurance companies such as Hiscox, Liberty Mutual, and the Hartford, etc. They can provide quotes from these companies for consumers to consider. That’s the key benefit of working with a digital broker such as CoverWallet. Once you provide your information, within minutes, you will see several quotes from their partners in one place so that you can compare them conveniently.

Once you buy a policy through CoverWallet, you will have access to their digital dashboard to manage all of your business insurance policies in one place. The digital dashboard also offers great features such as downloading the certificate of insurance, filing a claim, or renewing a policy.

AIG – American International Group: Best for Separate and Distinct Product Liability Options

AIG offers several distinct product liability options. It offers a base product liability plan. It also has contaminated product insurance for if a product is contaminated or recalled. It also offers its RecallResponse, which covers a wide range of different recall expenses.  

AIG does not offer product liability insurance quotes online. Instead, AIG wants you to contact them through an online contact form to start the process.   

>>MORE: Full Review of AIG Small Business Insurance

The Hartford: Best for Umbrella Liability Option

The Hartford is a little more difficult to find information relating specifically to product liability insurance. It mentions product liability insurance directly on its page talking about the different types of liability insurance.  

Then, in the quote process, you can choose between four different types of insurance: property insurance, general liability insurance, workers’ compensation insurance, and commercial auto insurance. However, the general liability selection includes coverage involving claims against your products or business operations. Basically, go with this company if you’re looking for more of an umbrella liability option.  

>>MORE: How Much does General Liability Insurance Cost?

For $1 million in each occurrence and $2 million in aggregate limits, the online quote system gave us $57 a month for a base liability policy.        

>>MORE: Full Review The Hartford Small Business Insurance

>>MORE: How Much does Product Liability Insurance Cost?

Nationwide: Best for Comprehensive Coverage of Product Liability Insurance

For Nationwide, the quote system does not mention product liability insurance specifically. However, Nationwide’s site does have a page mentioning product liability. It covers the legal fees associated with a product liability claim or lawsuit. It also covers medical costs, compensatory damages and business damages, which is fairly comprehensive. The company wants you to call to start the quote process.    

>>MORE: Full Review of Nationwide Small Business Insurance 

Chubb: Best for Customized Claim Management

Chubb specializes in customized claim management through the ESIS ProClaim system. Basically, it looks at your specific situation to help with the claims process, including expense control, litigation management and claim intake. Go with this company if you want a service that is highly customizable even after you purchase a policy. Chubb is another company that wants you to contact them directly to learn more.     

>>MORE: Full Review of Chubb Small Business Review

CNA: Best Product Liability Insurance for Manufacturing Companies

CNA is an interesting option in that it specifically insures manufacturing companies. If you want a product that’s specifically tailored to your manufacturing operation, this is the company to contact. It covers in the event of claims against a flawed component or product you fabricated. In order to start setting up a plan and getting a quote, the company wants you to contact an agent.  

Different companies have different products and different products may cause different types of damages. In order to protect you and your company from potential law suits that your product may cause, you should shop around with a few companies and compare their coverage details and limits to choose the best one for you.

As you can see different insurance providers have different products and different products may cause different types of damages. In order to protect you and your company from potential lawsuits that your product may cause, you should shop around with a few companies and compare their coverage details and limits to choose the best one for you.

What is Product Liability Insurance? 

Product liability insurance is coverage designed to protect your business from claims or fees levied against it over potentially faulty products. These can be claims that a product your business sold hurt someone or damaged personal property. Other events that product liability insurance covers include:

  • Design defects
  • Manufacturing defects
  • Customer injury
  • Improper labeling 

It’s possible to find insurance providers who offer product liability insurance as a stand alone policy. However, many insurers choose to combine it with a general liability insurance policy.

>>MORE: Product Liability Insurance: What It Covers & Who Needs It

What Does Product Liability Insurance Cover? 

When you are covered by product liability insurance, you’ll be able to get help with:

  • Medical costs for injured customers
  • Legal costs incurred when defending your company
  • Settlements your company pays out to customers/claimants
  • Fees your company pays regarding faulty products

What Does Product Liability Insurance Not Cover? 

Like most kinds of insurance, product liability insurance doesn’t cover everything related to your faulty products. When shopping for this type of insurance, be sure to find out exactly what each insurance provider covers and doesn’t cover. However, there are some circumstances that most insurers don’t cover, such as the following:

  • Employee injuries incurred during production
  • Product recalls
  • Damage to your products
  • Lost or stolen inventory

What Types of Claims Does Product Liability Insurance Protect Against?

There are also many kinds of insurance on the market that cover issues relating to your products. For instance, product recall insurance will cover the costs of issuing product recalls, and property damage insurance covers the costs of replacing merchandise that’s damaged in a flood or fire.

However, product liability insurance only kicks in for specific circumstances relating to products with pre-existing faults. Here are a few examples:

  • A customer buys some exercise equipment that is made from poor quality steel. It breaks during a workout and the customer tears a muscle in their back. Your business could be liable for the medical costs, physical therapy, and a refund of their initial investment.
  • Your company is sued by a customer who claims an ointment you made gave them a bad rash. Your product liability insurance should cover defense costs and any settlement.
  • You sell wall paint that damages and weakens the drywall underneath after application. Your product liability insurance should cover the cost of repairing or replacing the drywall and refunding the customer.

Who Needs Product Liability Insurance? 

Not all companies will require product liability insurance. However, if you sell products to customers or make products that a client of yours sells to customers, this insurance is vital.

Manufacturers, production plants, designers, and retailers can all benefit from the protection of product liability insurance. Basically, if you are at any point in the production and sales process for a product, your company could potentially face a lawsuit.

Almost any kind of industry is at risk of a claim for faulty products, but some face high settlements and fees. This is due to the potential harm that products made by companies in these industries may cause or the number of potential victims of a faulty product. The industries can include:

  • Food Manufacturing & Retail
  • Baby Products
  • Cosmetics
  • Medical Equipment, Products, & Medication
  • Automotive

Other industries that you might be surprised to find need product liability insurance can include:

  • Website Design
  • Software Development
  • Product Design
  • Raw Materials & Mining
  • Equipment Supply

How Much Does Product Liability Insurance Cost?

Product liability costs can vary quite a bit from company to company as there are different factors that can affect your rates. The costs of product liability insurance in a low-risk industry average .25 cents per $100 in revenue. So, a baby toy manufacturer with approximately $2M in annual revenue could expect to pay about $5,000 per year for product liability insurance.

Many insurance companies and brokers, like CoverWallet, want businesses to provide information for review. After analyzing certain factors, like revenue and prior claims, an agent will respond with a quote for coverage.

It is always a good idea to shop around with a few insurance companies or with a digital broker like CoverWallet, Simply Business,, or to compare several quotes before making your final decision.

>>MORE: How Much does Product Liability Insurance Cost?

What Affects the Cost of Product Liability Insurance? 

Like other kinds of insurance, the cost of product liability insurance can be affected by different factors. If you are looking for product liability coverage, your agent likely look at the following information to create a quote:

  • The amount of coverage being purchased
  • The industry the company is in
  • The location of the company
  • The company’s annual revenue
  • Any previous claims history

How to find cheap product liability insurance?

Here are a few ways for small business owners to pay less for product liability insurance:

Bundle product liability insurance in a business owners policy (BOP)

If you have a Business Owners Policy, the least expensive way to get product liability coverage is to add it on. If you don’t have a BOP, it could be a smart idea to look into it. It’s a good way to get complete insurance protection for your business at a relatively affordable price.

Pay your premium annually

Many insurers offer discounts for businesses that pay the total annual premium when they get or renew coverage instead of paying in installments. Paying monthly or quarterly will increase your total cost by 10-15%. If you can afford to pay annually, that would save your money on the policy.

Manage risks.

If you don’t make claims on your product liability insurance, your premiums will be lower than if you do. To keep costs down, take steps to reduce your need to make a claim, such as:

  • Thoroughly testing anything you sell
  • Practicing strict quality control on anything you manufacture 
  • Training your employees on the proper use, set-up, and installation of products and equipment 
  • Offering products made by reputable companies
  • Not selling any type of merchandise that’s likely to cause injury or property damage
  • Staying alert, always looking out for things that don’t seem right
  • Training employees on how to educate customers about proper product use.

Shop around and compare quotes

Last but not least, don’t buy the first quote that you receive. Be sure to shop around with a few carriers. Insurance companies view the risks of your business differently. They will give you different quotes. If you buy the first policy you are provided, you will certainly leave money on the table. A good way to shop around with spending much time and efforts is to work with a top broker like CoverWallet,, or They can get several quotes from their partners for you to compare and select the cheapest one for you.

What is Product Recall Insurance? How is it Different From Product Liability Insurance? 

Product recall insurance is very different from product liability insurance in that it focuses solely on the recall of goods. Most product recall insurance covers the costs associated with it, such as:

  • Shipping
  • Warehousing
  • Disposal
  • Restocking

However, product liability insurance covers the costs of injuries and damage caused by a faulty product. 

Theoretically, your company could need to use both types of insurance. For instance, a manufacturing facility that makes lamps could accidentally fabricate a new product that shocks people after it’s been switched on. That company’s product recall insurance would cover the cost of recalling the faulty lamps, while their product liability insurance would cover medical bills of customers who were shocked by the lamps. 

What is the Difference Between Product Liability and General Liability Insurance? 

It can be harder to tell the difference between product liability and general liability insurance. Generally, the latter is designed to cover bodily injury and property damage that result from:

  • Accidents that occur on your property 
  • Accidents that occur during business operations
  • Advertising injury claims against your business
  • Property damage that results from your staff or equipment

As you can see general liability coverage is meant to cover accidents that can happen during normal business operations. Yes, your forklift may be a product that your business owns, but the cracks it causes in your customer’s concrete driveway aren’t covered by product liability. They would be covered by general liability insurance.

>>MORE: The 10 Best General Liability Insurance Companies for 2021

What is the Difference Between Product Liability and Professional Liability Insurance? 

Product liability insurance is also different from professional liability insurance, though both coverages do apply to something your customers purchase. Professional liability insurance covers the costs associated with business mistakes and negligence. For instance, it can cover the costs of defense if an accountant is accused of not keeping their clients accounts in good order. It can also cover accusations of:

  • Omission of important information
  • Poor legal representation and advice
  • Giving poor advice

Do you need product liability insurance if you sell your products on Amazon?

Yes, if your monthly sales revenue from Amazon platform reaches $10,000, you are required to have product liability insurance policy. Otherwise, you can be kicked out of the Amazon platform. You can buy your product liability insurance policy from Amazon Insurance Accelerator program. Learn more about Amazon Seller Insurance: How It Works and Best Providers

>>MORE: 11 Best Professional Liability Insurance Companies

Would Peloton benefit from a product liability insurance policy or a product recall policy or both?

Peloton: In May 2021, Peloton Interactive Inc. issued a product recall for two of its popular treadmills after receiving warnings from the Consumer Product Safety Commission over 70+ incidents, including the death of a child. In such case, the costs Peloton has to pay for the damages caused to their 70+ customers, including the legal expenses, should be covered by its product liability insurance policy. On the other hand, the costs associated with its product recall is covered by a product recall policy, if they have one.

Johnson & Johnson could benefit from a product liability insurance policy in its baby powder ovarian cancer case

Johnson & Johnson: In 2018, a jury awarded $4.6 billion in damages to 22 plaintiffs in a lawsuit alleging that Johnson & Johnson Baby Powder cause ovarian cancer. In this case, if Johnson & Johnson has a product liability insurance policy for its baby powder product, the policy would pay for the $4.6 billion settlements.

Does 3M have a product liability insurance policy for its combat earplugs product?

3M: As of August 2021, the manufacturer, 3M, was fighting a series of lawsuits brought against it over alleged faulty combat earplugs. There are currently over 240,000 claims brought by veterans and service members, in the largest multi-district litigation suit ever. The lawsuit is still ongoing. If the court is to rule against 3M and orders it to pay for the damages caused to the veterans, a product liability insurance policy, if being in place, would definitely help cover the associated costs.

Bayer’s Roudup Weed Killer case – was it covered by a product liability insurance policy?

RoundUp: In June 2020, international company Bayer, agreed to pay $10B in settlements to thousands of plaintiffs over claims that its product, Roundup Weed Killer, caused cancer.

If Bayer has a sufficient product liability insurance policy in place for Roundup product, that policy would definitely cover the settlements.

Did a product liability insurance policy cover the $28M in the Philip Morris’s case?

Philip Morris: Way back in 2002, cigarette manufacturer, Philip Morris was ordered to pay a whopping $28B to a single woman who claimed their cigarettes gave her lung cancer. Later the award was slashed to a more “reasonable” $28M by a superior court judge. If Philip Morris has a product liability insurance policy, that would help cover the legal settlements.

Final Thoughts

  • Product liability protects your company against claims of bodily injury and property damage incurred as a result of a faulty product. 
  • Product liability insurance costs are usually based on a small percentage of a company’s annual revenue.
  • Product liability is different from general liability, product recall, and professional liability insurance.
  • There are a few insurance companies that offer product liability insurance including: AIG and Chubb. 
  • You can compare product liability coverages with an online broker like CoverWallet.


How much does it cost for product liability insurance?

Unfortunately, this question has no one answer. Price can fluctuate based on industry risk and the size of your business. However, for reference, we did get a $57/month quote from the Hartford for a small bakery.

Is product liability insurance included in general liability?

Sometimes yes, but usually it is a separate product. Be sure to check with different companies to make sure what is all covered in each policy.

Do I need product liability insurance?

If you sell or manufacture a physical good, you should consider product liability insurance. All it takes is one person to be harmed in some way by your product for a lawsuit to result.

Thang Truong
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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