Do I need product liability insurance when shipping products to the USA?
This probably isn’t a simple yes or no answer but lets take it one step at a time.
If you sell goods of any description anywhere in the world, including the UK without doubt you need adequate insurance cover, in fact the most critical bit of cover you need is Product Liability Insurance.
Product Liability Insurance covers you against any claims that may arise from someone using your product that might be injured by it or it causes damage.
Is it a legal requirement, no its not, certainly in the UK it isn’t, however you may find that if you are shipping your products to the USA or Canada for instance you may be asked to provide proof that you have the correct cover in place.
I sell my products online so do I still need the cover?
There is no difference in insurance cover requirements if you sell online or from a high street shop for instance, the risks remain the same.
On-line market places such as Amazon, Amazon Handmade, Etsy can be very easy places for anyone to promote their goods, and whilst it’s a requirement for Amazon Pro Sellers to have insurance over a certain level of sales, there are no similar demands at a lower level.
Obviously the range of products available on these websites is infinite the risks still remain the same, should that product cause loss, damage or injury then the chances are, and particularly if you have sold to the USA or Canada then you may find a claim against you, and it doesn’t necessarily have to be your fault.
Its not my fault so it doesn’t matter… does it?
A scenario… you have sold your product (can be anything to anywhere) unfortunately whilst its being used it causes some injury, spilled liquids on skin, an item to be worn where you haven’t quite finished the product or a consumable item that has caused sickness, these are areas where you might find you have an action against you.
But what if you know it wasn’t your fault, user didn’t read the instructions, the item was not used for its intended purpose, the item had been mistreated, the list is endless. You are confident that it wasn’t your fault, but what about the costs involved to prove that?
Having legal action taken against you even in the UK there are going to be costs involved, at least in the UK you might have a good understanding of the legal system, but what if the action is taken against you in the USA, that’s not going to be as easy to defend and the costs involved can be extensive.
So, do I need Product Liability insurance when shipping goods to the USA? without a doubt you do, whether you are a larger seasoned exporter, or you are a maker from home who manufactures their range of Soap.
Are some products more of a problem than others?
Without a doubt yes, anything to do with babies is a problem, even simple pieces of material such as the old style terry towel nappies, children’s toys, anything that is consumed or designed to be used in or on the body itself, things that can be ridden such as bikes, anyway you ge the idea but the higher the risk the higher the premium.
The internet is full of insurance experts who make assumptions on false logic, reading through many examples its seen that when selling higher risk items that is when cover is required and not for the soap maker.
This is completely wrong, this said there is no actual legal requirement to have the cover, however as we have seen, any product can cause a loss, damage or injury to a member of the public so the fact that something may be considered low risk should make no difference whatso ever, and of course the cost to defend even if it wasn’t your fault.
Where can I obtain Product Liability for exporting my goods to the United States or Canada.
Clearly you need to speak with a specialist who is experienced in placing insurance covers for selling products to North America. Whilst there are online options it cant be stressed enough that the purchaser of the cover must ensure they understand the policy cover. A policy that is obtained in the UK for instance will almost certainly have UK jurisdiction, not much use if an action is brought in a US court.
Speak to us about your liability insurance needs – 01623 889530