What is Product Liability Insurance?

How Much Product Liability Insurance Cover Do I Need?

Deciding on the right amount of Product Liability Insurance cover depends on several factors, particularly if you’re a market trader or stallholder selling products. Here’s what to consider:

1. Type of Products: If you sell higher-risk items like food, electrical goods, or cosmetics, you may want to opt for higher coverage limits. These products can lead to more significant claims if they cause injury or damage.
2. Potential Compensation Claims: Think about the worst-case scenario. If a product you sell causes serious injury or property damage, compensation claims can be substantial. Higher coverage limits provide more protection against these costs.
3. Market Organiser Requirements: Some markets or events may require a minimum level of Product Liability Insurance. Always check with the event organisers to ensure you meet their requirements.

For example, if you sell handmade crafts at a local market and one of your products causes injury, having the right level of cover ensures you’re protected financially. Similarly, if you’re a food vendor and a customer experiences food poisoning from your products, higher coverage limits can help cover the resulting claims.

By choosing the right level of Product Liability Insurance, you can trade with confidence, knowing you’re prepared for any unexpected incidents.

When Should I get Products Liability Insurance?

Product Liability Insurance is essential for any business that manufactures, supplies, or sells products, especially for market traders and stallholders. Here are some key scenarios where you should consider getting Product Liability Insurance:

1. Starting a New Business: If you’re launching a business that involves selling products, it’s wise to secure Products Liability Insurance from the outset. This ensures you’re protected from the moment you begin trading, whether you’re selling handmade crafts at a local market or running a food stall.
2. Expanding Your Product Line: If you’re introducing new products, especially those with higher risks), having Products Liability Insurance in place is crucial to cover any potential claims. For example, if you’re adding a new line of artisanal foods to your market stall, you’ll want to ensure you’re covered in case of any food-related incidents.
3. Entering New Markets: Whether you’re selling online or at physical markets, having the right insurance is vital. Many market organisers require proof of Products Liability Insurance before allowing you to trade, so it’s essential to have it in place before setting up your stall.
4. Scaling Your Business: As your business grows, so does the risk of product-related claims. Ensure your insurance coverage scales with your operations to protect against increased exposure. This is particularly important if you’re expanding your product range or increasing your trading frequency.
5. Contractual Requirements: If suppliers, distributors, or retailers you work with require Products Liability Insurance as part of your contract, it’s essential to have it in place to maintain these relationships and avoid any potential disputes.

By understanding these scenarios, you can ensure your business is adequately protected against the risks associated with selling products, allowing you to focus on growth and customer satisfaction.

How Much Does Products Liability Insurance Cost in the UK?

The cost of Product Liability Insurance in the UK varies depending on several factors, including the type of products you sell, the level of risk involved, and the coverage limits you choose. At CMTIA, we offer combined Public and Product Liability Insurance, which provides comprehensive protection for market traders.

Our policies start from just £65 per year for a £5 million limit of indemnity, making them affordable for traders. If you need higher coverage, you can opt for a £10 million limit for £78 per year. These prices include both Public and Product Liability Insurance, ensuring you’re protected against claims related to both your business activities and the products you sell.

Here’s a breakdown of our pricing:

• £5 million Public and Products Liability: £65 per year*
• £10 million Public and Products Liability: £78 per year*
• £5 million Public and Products Liability + Employers’ Liability: £97.50 per year*
• £10 million Public and Products Liability + Employers’ Liability: £110.50 per year*

CMTIA’s policies are specifically designed for market traders, covering a wide range of activities and products with no excess on claims. This ensures you’re protected without unexpected out-of-pocket costs if a claim arises. By choosing CMTIA, you benefit from no excesses on claims, a quick online application process, and flexible coverage options tailored to your needs.

All prices include Insurance Premium Tax (IPT) at 12% and an administration fee of £6. For more details on what’s covered or to tailor a policy to your needs, visit CMTIA’s website or contact our team directly.

What Claims Can Products Liability Insurance Provide Cover For?

Products Liability Insurance is a vital safeguard for market traders and small businesses that sell products. It protects against claims made by third parties for injuries or property damage caused by the products you sell, supply, or manufacture. Here are some real-world scenarios of claims this type of insurance can cover:

1. Injuries Caused by Defective Products: Imagine selling handmade candles at a market, and one of them has a faulty wick that causes a fire, injuring a customer. The fire might also damage the customer’s property, such as their home or belongings. Products Liability Insurance would cover the resulting claims for medical expenses, property damage, and compensation.
2. Property Damage: If you sell artisanal soaps and one of them causes a severe skin reaction, leading to medical costs and lost income for the customer, this insurance can help cover those expenses. Similarly, if a product you sell, like a handmade craft item, damages a customer’s property, such as a table or carpet, Products Liability Insurance could cover the repair or replacement costs.
3. Manufacturing Errors: Suppose you sell handmade jewellery and a piece has a sharp edge that wasn’t properly finished, causing injury to a customer. This type of insurance would protect you against claims arising from such manufacturing errors. For example, if a customer buys a necklace with a loose clasp that breaks easily, causing injury, you would be covered.

4. Failure to Perform: If a product you sell fails to perform its intended function and causes harm or damage, you may face a claim. For instance, if you sell handmade kitchen utensils and one breaks easily, causing injury, Products Liability Insurance can provide cover.
5. Legal Defence Costs: In addition to compensation pay-outs, Products Liability Insurance also covers the legal fees associated with defending against a claim. This is crucial, as legal costs can quickly add up, even if the claim is ultimately unsuccessful.

As you can see, even with rigorous quality control and testing, product-related incidents can still occur. Products Liability Insurance provides a safety net, ensuring that you’re financially protected against claims arising from your products, so you can focus on growing your business without the fear of unexpected financial burdens.

Do I Need Products Liability Insurance If I’m A Sole Trader?

As a sole trader, you might wonder if Products Liability Insurance is necessary for your business. The answer is yes, especially if you sell physical goods like food, handmade items, or electrical products. Products Liability Insurance protects you if a product you sell causes injury or damage to a customer or their property. Whether you’re running a market stall selling handmade crafts, operating a food stall, or providing a service that involves physical goods, there’s a risk of product-related claims.

Why Products Liability Insurance Is Important for Sole Traders:

• Legal Responsibility: Even if you didn’t manufacture the product, UK law holds you liable as the seller. This means you could face claims for compensation and legal fees if a product causes harm.
• Financial Protection: Without insurance, you’d need to cover these costs yourself, which could be financially devastating. Products Liability Insurance ensures you’re protected against unexpected claims.
• Market Requirements: Many market organisers require proof of Products Liability Insurance before allowing you to trade, making it a practical necessity for market traders.

In today’s business environment, where legal threats are on the rise, having Products Liability Insurance is more important than ever. It provides peace of mind and financial security, allowing you to focus on running your business without worrying about potential claims.

Do I Need Products Liability Cover to Sell Handmade Crafts in the UK?

Selling handmade crafts in the UK involves certain risks, particularly when it comes to product liability. While Products Liability Insurance is not a legal requirement, it is highly recommended for crafters who sell their products at markets or online.

Selling handmade crafts can expose you to potential claims if a product causes injury or damage. Even if you didn’t manufacture the raw materials, as the seller, you can still be held liable for any harm caused by your products. For example, if a customer buys a handmade candle from your stall and it causes a fire due to a defect, you could face a claim.

Many craft fair organisers require proof of Public and Products Liability Insurance before allowing you to sell at their events. This is typically a minimum of £5 million to £10 million in cover. Having this insurance ensures you can participate in these events without worrying about potential claims.

Without Products Liability Insurance, you would need to cover any compensation claims and legal fees yourself. This could be financially devastating for a small business or sole trader. Insurance provides peace of mind and financial security, allowing you to focus on your craft without worrying about potential risks.

Additionally, if you sell handmade items like cosmetics, candles, or food products, the risk of claims is higher due to potential allergies or defects. Products Liability Insurance is particularly important for these types of products.

For more detailed information on the types of insurance you need to sell handmade crafts in the UK, including Public and Products Liability Insurance, check out this article: Do I Need Insurance to Sell Handmade Crafts in the UK?. This guide will help you understand the legal requirements and practical necessities for protecting your craft business.

How Can I Make a Claim On My Products Liability Insurance?

If you need to make a claim on your Products Liability Insurance, the process is straightforward and handled directly by your insurer. At CMTIA, all claims are managed by AXA Insurance UK plc, ensuring you receive professional support throughout. Here’s a guide on how to proceed:

Steps to Make a Claim:

1. Review Your Policy
   Before initiating a claim, ensure the incident is covered under your policy. Check your documents to confirm that the product-related issue falls within the scope of your insurance.
2. Contact AXA Insurance
   Notify AXA Insurance as soon as possible by calling 0370 900 0867 (option 2). Early notification is crucial for efficient processing.
3. Provide Essential Details
   When contacting AXA, you’ll need the following information, which can be found on your certificate of insurance:
   • Scheme Policy Number: Begins with “BL BDX” followed by seven numbers.
   • Policy Number: Begins with “SMT” followed by five numbers.
   • Name of the Insured: The name under which the policy is registered.
4. Record Incident Details
   Be ready to provide a clear account of the incident, including:
   • The date, time, and location of the event.
   • A description of what happened and how it occurred.
   • Details of any injuries or property damage caused.
   • Contact details for any third parties involved or witnesses.
5. Submit Supporting Evidence
   If possible, provide photographs, witness statements, repair estimates (for property damage), or medical reports (for injuries). This will help AXA assess your claim quickly.
6. Follow Insurer Guidance
   AXA will guide you through the next steps, which may involve working with a solicitor or loss adjuster to resolve the claim.

Important Notes:

• Do not admit fault or liability at any stage without consulting AXA first.
• Notify AXA even if a formal claim hasn’t been made yet, as they can advise on how to proceed.

By following these steps and providing accurate information, you can ensure your claim is handled efficiently and professionally. For more details about making a claim, visit our dedicated page here: Make a Claim.

What Is the Difference Between Products Liability Insurance and Public Liability Insurance?

Products Liability Insurance and Public Liability Insurance are both essential types of cover for businesses and market traders, but they protect against different risks and are designed to address distinct scenarios.

Let’s say you’re running a food stall at a festival. If a customer slips on a spill at your stall and gets injured, Public Liability Insurance would cover the claim. However, if a customer gets food poisoning from one of your products, Products Liability Insurance would be necessary to cover that claim. By having both types of insurance, you can ensure your business is fully protected against a wide range of risks.

Products Liability Insurance:

• What It Covers: This insurance protects you if a product you sell, supply, or manufacture causes injury or damage to someone or their property. For example, if a customer buys a handmade candle from your stall and it causes a fire due to a defect, Products Liability Insurance would cover the resulting claims.
• Who Needs It: This type of insurance is crucial for businesses that sell physical goods, especially higher-risk items like food, cosmetics, or electrical products.
• Key Benefit: It provides financial protection against claims arising from product defects or failures, ensuring you can maintain your business operations without significant financial setbacks.

Public Liability Insurance:

• What It Covers: Public Liability Insurance covers claims made by third parties for injuries or property damage caused by your business activities. For instance, if a customer trips over a loose cable at your market stall and injures themselves, Public Liability Insurance would cover the claim.
• Who Needs It: This insurance is vital for businesses that interact with the public, such as market traders, event vendors, and service providers.
• Key Benefit: It provides protection against accidents that occur during your business operations, ensuring you can continue trading without financial disruption.

Key Differences:

• Scope of Coverage: Products Liability Insurance focuses on claims related to the products you sell, while Public Liability Insurance covers incidents caused by your business activities.
• Type of Claims: Product Liability Insurance typically involves claims for product defects or failures, whereas Public Liability Insurance involves claims for accidents or injuries caused by your operations.

At CMTIA, we offer combined Public and Products Liability Insurance, providing comprehensive protection for market traders. This ensures you’re covered for both product-related claims and business activity-related incidents, giving you peace of mind and financial security.

What’s the Difference Between Products Liability and Employers’ Liability Insurance?

When it comes to protecting your business, understanding the differences between Products Liability Insurance and Employers’ Liability Insurance is crucial. Both types of insurance provide essential protection, but they cover different risks and are designed for distinct scenarios.

Products Liability Insurance: Protecting Your Products

Product Liability Insurance protects your business if a product you sell, supply, or manufacture causes injury or damage to someone or their property. For example, if you sell handmade candles and one causes a fire due to a defect, this insurance would cover the resulting claims. It’s vital for businesses that sell physical goods, especially higher-risk items like food, cosmetics, or electrical products.

Employers’ Liability Insurance: Protecting Your Employees

On the other hand, Employers’ Liability Insurance covers claims made by employees for work-related injuries or illnesses. If an employee injures themselves while setting up your market stall, this insurance would cover the compensation costs and legal fees. It’s mandatory in the UK for any business that employs staff, including full-time, part-time, contractors, apprentices, and volunteers. Failure to have this insurance can result in fines of up to £2,500 per day.

Why Choose CMTIA For Your Products Liability Insurance

At CMTIA, we understand the unique challenges faced by market traders and stall holders. That’s why we offer combined Public & Products Liability Insurance solutions designed specifically for your needs.

What Sets Us Apart:

• Competitive Pricing: Our policies start from just £65 per year, making them highly affordable for traders.
• No Excesses: We don’t charge excesses on claims, ensuring you don’t face unexpected out-of-pocket costs.
• Quick Application Process: Apply online in just 2 minutes, and receive your documents within 20 minutes.
• Combined Cover: We offer combined Public and Products Liability Insurance, providing comprehensive protection for both your business activities and the products you sell.

By choosing CMTIA, you benefit from insurance that’s not only affordable but also tailored to your specific needs. Our policies are designed to protect you against product-related claims, ensuring you can focus on growing your business with confidence.

With quick applications, no excesses, and designed for market traders and stall holders, CMTIA makes protecting your business simple and stress-free. Apply online to protect your business today.