What is product liability insurance and warranty??
and how are they helpful to small business??
Answers:
Product liability is the part of insurance that kick in and protects your business, if your product is defective and causes injury to others (think, spinach infected next to e. coli). It pays your defense costs in a lawsuit, and it pays judgement, up to the policy limit.
Warranty - can be one of two things. When within reference to product liability, it's usually an important statement that the business make. If it turns out that the business did not abide by the statement, then it totally invalidates coverage. Example: You are growing spinach. You "warrant" that you will not use a plastic irrigation system. There happens to be a drought, and surrounded by your rush to water the spinach, you use a plastic irrigation system. The spinach goes discouraging, but you don't know it and sell it anyway. The e. coli is discovered - but not necessarily caused by the plastic irrigation system. Oops! NO coverage for this claim, because YOU voided the policy by breaking the warrant.
The other warranty, is something resembling you get on a tv at best buy - if the tv is defective, the warranty will replace it free of charge. It's an agreement between the manufacturer and the purchaser, but it's NOT covered by insurance.
Product liability insurance pays damages you are lawfully obligated to pay due to bodily injury or property damage arising out of your product.
The injured deputation may sue anyone associated with the product, not merely the manufacturer. For example, if the salesman at a retail store fail to warn the customer of a potential danger from the product, the injured group may sue the store.
Related Questions:
Answers:
Product liability is the part of insurance that kick in and protects your business, if your product is defective and causes injury to others (think, spinach infected next to e. coli). It pays your defense costs in a lawsuit, and it pays judgement, up to the policy limit.
Warranty - can be one of two things. When within reference to product liability, it's usually an important statement that the business make. If it turns out that the business did not abide by the statement, then it totally invalidates coverage. Example: You are growing spinach. You "warrant" that you will not use a plastic irrigation system. There happens to be a drought, and surrounded by your rush to water the spinach, you use a plastic irrigation system. The spinach goes discouraging, but you don't know it and sell it anyway. The e. coli is discovered - but not necessarily caused by the plastic irrigation system. Oops! NO coverage for this claim, because YOU voided the policy by breaking the warrant.
The other warranty, is something resembling you get on a tv at best buy - if the tv is defective, the warranty will replace it free of charge. It's an agreement between the manufacturer and the purchaser, but it's NOT covered by insurance.
Product liability insurance pays damages you are lawfully obligated to pay due to bodily injury or property damage arising out of your product.
The injured deputation may sue anyone associated with the product, not merely the manufacturer. For example, if the salesman at a retail store fail to warn the customer of a potential danger from the product, the injured group may sue the store.
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