What is public liability insurance?
Public liability insurance is one of the main types of business insurance
What is product liability insurance?
Product liability insurance protects your business if a product you make, sell, or supply causes injury or property damage. It covers legal fees and compensation costs if someone is hurt or their property is damaged because of a faulty or dangerous product.
For example, if a customer is shocked by a defective appliance you sold, or a faulty power tool causes injury, you could be held legally responsible – even if you didn’t manufacture the item.
This type of insurance is important for manufacturers, retailers, distributors, and importers, as anyone in the supply chain can be held liable.
Product liability insurance is useful because claims can be expensive and damaging to your reputation, even if the fault wasn’t directly your own.
How much does product liability insurance cost?
Business insurance (average price):
£7
.42^ a month
Product liability insurance is usually sold as part of a business insurance policy rather than as a standalone product.
The cheapest business insurance policies start from £5.41
Your business insurance policy can bundle product liability insurance with other types of useful protection for your business, such as:
Public liability insurance - covers costs if members of the public are harmed
Employers liability insurance - covers costs if employees are harmed
Professional indemnity insurance - covers costs if clients are harmed
Which factors impact the price?
Type of product – Higher-risk products (e.g. electronics, food, medical devices) typically cost more to insure.
Business size and revenue – Larger businesses with higher sales usually pay more due to increased exposure.
Claims history – A history of previous claims can raise premiums significantly.
Distribution channels – Selling internationally or through third parties (like Amazon) may increase premiums.
Manufacturing process – Outsourced or overseas manufacturing can affect risk and pricing.
Cover limits – Higher cover limits and lower excesses will increase the premium.
Industry regulations – Businesses in heavily regulated industries (e.g. pharmaceuticals) often face higher premiums.
How does product liability insurance work?
Here’s a step-by-step guide to how product liability insurance works:
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Incident occurs
A customer is injured or suffers property damage due to a product you sold, made, or supplied. e.g. a defective toaster catches fire and damages a customer’s kitchen.
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Claim made against you
The affected customer makes a formal complaint or legal claim, seeking compensation for injury or loss.
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Notify your insurer
You must contact your product liability insurer as soon as you're aware of the incident. Delays can affect your cover.
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Investigation begins
The insurer investigates the claim. They may examine the product, review your safety and quality control records, speak to witnesses, and determine if you're legally liable.
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Legal support provided
If the claim proceeds, your insurer arranges legal representation to defend your business and manage the legal process.
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Claim resolution
If you're found liable, the insurer pays compensation and legal costs up to your policy’s limit.
What businesses need product liability insurance?
Product liability insurance is important for any business that manufactures, sells, supplies, or handles physical products, whether directly or indirectly.
If your business plays any role in getting a product into a customer’s hands, you could be held liable if something goes wrong.
Business type | Why they need it |
|---|---|
Manufacturers | They are responsible for the design, quality, and safety of the products they produce. |
Importers | If you import goods, especially from outside the UK or EU, you're treated as the manufacturer under the law. |
Retailers & wholesalers | Even if you didn’t make the product, you can be liable if the manufacturer can’t be traced or if you gave poor instructions or advice. |
Online sellers (e.g. Etsy, eBay, Amazon) | Selling products online still carries the same legal responsibilities, especially if the goods are unbranded or sourced from overseas. |
White label brands | If you rebrand another company’s product as your own, you assume the role of the manufacturer in the eyes of the law. |
Repairers & modifiers | If you alter or fix products and something goes wrong, your work could be blamed for any resulting damage or injury. |
Caterers & food businesses | Food and drink products carry a high risk of contamination, allergic reactions, or mislabelling, making claims more likely. |
What are the most common product liability insurance claims?
The following are common claims covered by product liability insurance:
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Manufacturing defects
Flaws that occur during the production process, making a product unsafe.
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Design defects
Inherent issues in the product’s design that render it dangerous, even if properly manufactured
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Failure to warn
Lack of adequate instructions, warnings, or safety labels leading to misuse and injury.
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Contaminated products
Claims related to food, cosmetics, or pharmaceuticals causing illness or allergic reactions.
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Improper packaging
Packaging that fails to protect the product or poses a risk to users.
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Misleading marketing
False or exaggerated claims about a product’s safety or performance.
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Property damage
When a defective product causes damage to third-party property.
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Personal injury
Harm caused to a consumer due to a faulty or dangerous product.
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Product recall expenses
Costs related to recalling unsafe products, if included in the policy.
Our expert says…
Product liability cover offers useful protection against claims related to defective or unsafe products, which can be valuable whether you manufacture, sell or distribute them. A recent study by Allianz found that 11% of business insurance claims were for damaged goods – so product liability insurance can be well worth having.
In today’s market a single fault product can lead to costly legal claims or reputational damage; while the idea might be horrible, sadly these things do happen.
Product liability insurance can cover a wide range of industries, from manufacturing to retail, so comparing deals will help you find the right policy for your business.
Emma Lunn Personal finance expert
How do I get a product liability insurance quote?
Comparing business insurance quotes with MoneySuperMarket and our preferred partner SimplyBusinessis the easiest way to find an affordable deal on cover. Here's how it works:
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Let us know about your business, who you employ, and how much cover you need, and we'll find deals tailored to your requirements
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Choose the one you like
Once you’ve found a deal you like, simply click through to the provider – they’ll take it from there
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What other types of insurance can I get for my business?
Different insurance protects against different risks, helping ensure business continuity if anything goes wrong.
The most popular business insurance types are:
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Public liability
This covers you against any claims from members of the public that aren’t related to your products – for instance, a customer could slip and fall in your shop or café
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Professional indemnity
If you sell professional services, this protects you against claims from clients if they’re not happy with your work
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Employers’ liability
If you have any employees, this is a legal requirement: it covers you in case anyone who works for you becomes ill or is injured
Is product liability insurance a legal requirement?
No, you’re not legally required to get product liability insurance. But if you’re legally liable for the products you make or sell, it’s something you should seriously consider. If a customer sues over a faulty product, you could have to pay costly legal fees, and even more if you’re ordered to pay compensation. But with insurance, your provider will cover these costs.
Do I need product liability if I sell second hand products?
Yes, you may still need product liability insurance if you sell second hand products.
If you repair or refurbish any products you sell, it’s likely you’ll be legally liable if they hurt someone. And even if you aren’t, retailers are usually responsible for a product’s safety if the original manufacturer no longer exists, which is always a risk with second hand goods.
What’s the difference between product liability and public liability?
Both product liability and public liability protect you against claims from members of the public, but they cover very different types of claim. Product liability covers you in case there’s something wrong with a product you sell. Public liability protects you against claims for other problems as a result of your business activity. For instance, a customer could becoming injured in your place of business.
Do online or e-commerce sellers need product liability insurance?
Yes, online and e-commerce sellers do need product liability insurance. Even if you don’t manufacture the products yourself, you can still be held legally responsible if a product you sell causes injury or damage. This applies whether you sell through your own website or on third-party platforms like Amazon, eBay, or Etsy.
What happens if I sell imported products — am I liable?
Yes, if you sell imported products, you can be held legally liable for any damage or injury they cause — even if you didn’t manufacture them. In the UK and many other countries, when you import a product from outside the UK (especially from outside the EU), you are considered the manufacturer in the eyes of the law.
How do I know if my business is legally responsible for a product?
To determine if your business is legally responsible for a product, consider whether your role places you within the supply chain in a way that creates liability under product safety laws.
In the UK, you're likely legally responsible if you manufacture the product, import the product into the UK, sell or distribute products under your own brand or label, repair, modify, or refurbish a product and then sell it, or sell through a website or marketplace that makes you the main point of contact for customers.
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Is business insurance eligible for SuperSaveClub and rewards?
No, at this time business insurance is not an eligible product for unlocking our SuperSaveClub rewards. It is also not included in our Price Promise.
Who are Simply Business?
Simply Business is one of the largest insurance brokers in the UK. They work with leading and specialist insurers to provide cover for small business owners, landlords and self-employed workers.
MoneySuperMarket has a commercial partnership with Simply Business. They offer various business and landlord insurance policies from different insurers through our platform, allowing our customers to find affordable quotes and policies that suit your specific needs.
Reviewed on 11 Dec 2025 by
According to Simply Business data, 51% of customers paid £7.42 or less monthly for a public liability insurance policy with Simply Business. Figure based on annual quotes purchased between 1st October- 31st December 2024.
According to Simply Business data, 10% of customers paid £5.41 or less monthly for a public liability insurance policy. Figure based on annual quotes purchased between 1st Aug - 31st Oct 2025. The price is for up to £2 million of public liability insurance and excludes the extra costs for paying monthly