Personal Insurance
Business Insurance
Industry
Insurance by Industry
Product liability insurance protects a business when goods it makes, imports or sells injure someone or damage their property. It matters most for importers, manufacturers, wholesalers and online sellers, because Australian law can treat an importer or brand owner as the manufacturer. Fortis Risk Solutions arranges this cover from offices in Box Hill and Hawthorn, usually alongside public liability in one policy, and checks your product list and supply contracts before going to insurers.
What Product Liability Insurance Covers
Product liability insurance covers your legal liability when goods you make, import, sell or supply cause injury to someone or damage to their property. It suits manufacturers, importers, wholesalers and online sellers. Most insurers write it together with public liability insurance as one policy. The products part usually carries an annual aggregate limit: the most the policy pays for all product claims in the year.
The Australian Consumer Law makes a manufacturer liable to compensate a person injured by a safety defect in its goods (section 138). The definition of manufacturer is wide. An importer counts as the manufacturer when the overseas maker has no place of business in Australia. So does a business that puts its own name or brand on the goods.
Sellers further down the chain are not always safe either. If an injured person asks a supplier in writing who made the goods and still does not know 30 days later, that supplier can be treated as the manufacturer (section 147). Keep supplier records for every line. An action can be brought up to 10 years after the goods were supplied.
Fortis Risk Solutions arranges product liability insurance from offices in Box Hill and Hawthorn as part of our business insurance range. We look at what you sell, where it is made, the markets you sell into and the contracts you sign with buyers. Factories usually take the product cover inside a wider manufacturing insurance program with property, machinery and business interruption insurance.
Who this covers
Businesses in this group include:
- Importers of goods made overseas
- Manufacturers and food producers
- Wholesalers and distributors
- Online sellers and private label brands
- Retailers selling goods they did not make
If your business is not listed, ask us. The sections below are the starting point for any business that supplies goods.
Product Liability Insurance: Cover Sections and Benefits
Product Liability Insurance FAQs
Public liability responds to injury or damage caused by your business activities, such as a visitor tripping in your warehouse. Product liability responds after the goods have left your hands. Most policies combine both, with one limit or two. Professional indemnity is different again: it covers loss caused by advice or design work. Our guide to product liability vs public liability has worked examples.
No. Product liability responds to injury or property damage caused by the goods. The cost of getting faulty goods back, destroying them and replacing them sits under product recall insurance, which is a separate policy. Under the Australian Consumer Law, a business that voluntarily recalls consumer goods for safety reasons must notify the Commonwealth Minister in writing within 2 days.
Often, yes. Under section 7 of the Australian Consumer Law, an importer is treated as the manufacturer if the overseas maker has no place of business in Australia at the time of import. An injured customer can then bring the claim against you. Insurers will ask where the goods are made, which standards they are tested to and what records you hold.
Yes. A small business that sells physical goods, including through its own website or a marketplace, carries the same exposure as a larger one if it imports or brands those goods. Cover can be written on its own or inside a business insurance package. When a buyer or marketplace asks for proof of cover, we send them a certificate of currency.
The product comes first. Anything eaten, applied to skin, ridden, plugged in or given to children is rated higher. Insurers then look at turnover, where the goods are made, export sales to the United States and Canada, quality control and the limit you choose. Food production businesses face extra questions on food safety programs, which our food manufacturing insurance is built around.
Product wordings turn on what you declare: the product list, countries of manufacture, export markets and the contracts you sign. FRS helps you disclose activities accurately, structure limits that meet your contracts, compare specialist insurers and act as your advocate at claim time. We also read the indemnity clauses in your supply agreements against the policy before you sign.
Talk to a broker about Product Liability Insurance
Call 03 7046 3766 on weekdays between 9:30am and 6pm, email admin@fortisrisksolutions.com.au, or send an enquiry and a broker from our Box Hill or Hawthorn office will come back to you about product liability insurance. Tell us what the business does and what the lease or contract asks for, and we take it from there.