For many retail business owners, Public Liability insurance for retailers is essential. These policies provide basic coverage against “slip and fall” lawsuits and other common claims that you may face. But did you know that your Public Liability policy might also give you peace of mind if the products you make or sell cause injury or property damage?

Here’s a closer look at Product Liability insurance for retailers, a typical addition to most Public Liability policies.

What is Product Liability insurance?

Consider this example*: A retailer makes custom clothing from fabrics that contain a hazardous chemical that causes serious illness to one of their customers. They didn’t make the fabric, but the retailer could still be held liable for the customer’s illness or injuries. Claims like these can ruin a small retailer’s finances and business.

Product Liability provides protection in relation to claims by third parties due to personal injury or property damage caused by products sold or supplied by your business. Reasonable costs incurred in defending a covered claim will also be met.

Aussie retailers are responsible for making sure the products they make and sell are safe. They must comply with product liability laws and meet relevant Australian Consumer Law (ACL) standards. You can find more information about your responsibilities on the Australian Competition & Consumer Commission (ACCC) website.

What is (and isn’t covered)

Let’s look at the coverage that Product Liability insurance provides in more detail. Product Liability insurance typically covers:

  • Personal injury suffered by a third-party – Faults in a product’s manufacturing, a defect in its design, or incorrect warnings, labelling, or instructions could cause injury to a customer or member of the public.
  • Damage to a third-party’s property – Faults, defects, and incorrect labelling can also cause your products to damage someone else’s belongings.
  • Your legal and defence costs for related claims – Product liability claims and lawsuits are often expensive. The longer they take to resolve, the larger these bills can get. Even if you’re not at fault, defending yourself against these claims could still empty your bank accounts!

Product Liability insurance helps protect your business against many serious and potentially expensive claims. But this coverage is limited. A Product Liability policy typically does not cover things like:

  • Personal injuries to you or your employees
  • Damage to your own property
  • Costs of repairing faulty workmanship
  • Professional negligence or unlawful activity
  • Reckless or wilful failure to take care
  • Asbestos
  • Pollution

The Product Disclosure Statement (PDS) you receive with your insurance policy details exactly what is and isn’t covered by your Product Liability insurance. You can always check the PDS or ask your insurer if you’re unsure about the coverage provided.

What exactly is a “product”?

You may have read this far and are still wondering if Product Liability insurance is relevant to your retail business. Fair enough! A common definition of “Product” includes many items that you might not have considered, such as anything that is:

  • Manufactured or made
  • Constructed, erected, assembled, or installed
  • Grown, extracted, or produced
  • Processed, treated, altered, or modified
  • Repaired or serviced
  • Bottled, labelled, or handled
  • Sold, supplied, re-supplied, or distributed
  • Imported or exported

Products may be directly created or sold (or any of the other words listed above) by you or on your behalf. So, if you make an item that is then sold at another retail shop, you’re still liable for the safety of the product.

Where to buy Product Liability insurance

If Product Liability insurance sounds like something your retail business should have, then you might be wondering how to buy a policy. Going directly to each insurer and waiting for quotes probably isn’t how you want to spend your day. Luckily, you don’t have to.

Public Liability Australia has simplified the process of buying insurance for retailers. You can get and compare multiple free quotes from some of Australia’s top insurers and buy the policies that work for you—online in minutes! You can even compare other kinds of insurance for retailers, like coverage for your stock and contents, at the same time.

Get hassle-free quotes today and start protecting your retail business!

*The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Coverage for claims on the policy will be determined by the insurer, not Public Liability Australia.

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. 

© 2022 BizCover Pty Limited, Public Liability Australia is a business name of BizCover Pty Ltd (ABN 68 127 707 975; AFSL 501769)