LIABILITY INSURANCE
Product liability insurance (PL) definition
Product liability insurance is cover that protects businesses against claims for injury or damage caused by products they manufacture, sell or supply.
In practice, this means cover for legal liability arising from bodily injury or property damage sustained by third parties caused by products produced, repaired, supplied or sold by the insured. Cover includes costs and damages payments. This term gives insurers, brokers, reinsurers and risk managers a common way to discuss the concept when reviewing policies, claims, regulation or market data.
This term is especially useful in liability insurance, claims handling and policy wording. It helps assess legal responsibility, claim response and protection against third-party or employee claims. It also helps users compare how insurance is structured, regulated, priced or claimed across different markets.
Product liability insurance (PL) is closely related to liability insurance, product recall insurance, bodily injury and property damage. Linking these concepts together helps build a clearer glossary structure and gives readers a stronger understanding of how individual insurance terms connect within wider international insurance practice.
At a glance
- Used in
- Liability insurance, claims handling and policy wording.
- Purpose
- Helps assess legal responsibility, claim response and protection against third-party or employee claims.
- Important because
- Clear definitions support better comparison of insurance products, market practices and regulatory requirements across jurisdictions.
- Related terms
- liability insurance, product recall insurance, bodily injury and property damage.
Example of product liability insurance
A customer is injured by a defective product and makes a claim against the manufacturer. Product liability insurance may cover defence costs and compensation.