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What is product liability insurance?
Product liability insurance can help protect your business if someone claims they have suffered an injury, illness or property damage because of a product you made, imported, supplied or sold.
For example, a customer could claim compensation if a faulty electrical appliance caused a fire or a contaminated food product made them ill. Depending on your policy, product liability insurance may cover legal defence costs and compensation you’re legally liable to pay.
The cover you need depends on your products, your role in the supply chain and the risks associated with your business. Manufacturers, importers, own-brand businesses, wholesalers, retailers and online sellers may all face product liability risks.
Product liability insurance is commonly included with public liability insurance or a wider business insurance policy. Check the policy wording to understand exactly what is covered, the applicable limits and any exclusions.
What does product liability insurance cover?
Policies vary in what they cover and exclude, so always check your policy documents carefully.
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Can be covered
Injury or illness suffered by customers or other third parties because of a defective product
Damage to someone else’s property caused by a faulty or unsafe product
Compensation payments if your business is legally liable for a covered claim
Legal defence costs associated with a covered product liability claim, subject to the policy terms
Claims arising from manufacturing defects, design faults or inadequate safety warnings, where covered by the policy
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Not usually covered
Repairing or replacing the defective product itself
Product recall, withdrawal or disposal costs, unless specifically covered
Poor workmanship or a failure to meet agreed specifications
Pure financial losses that do not result from covered injury or property damage
Damage to your own business property
Employee injuries, which are generally dealt with under separate insurance arrangements
Deliberate wrongdoing or other activities excluded by the policy
Claims arising from professional advice or services, which may require professional indemnity insurance
How much does product liability insurance cost?
Business insurance (average price):
£6
.52[1] 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 £5.05[2] a month.
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
Compare quotes on a like-for-like basis, checking the indemnity limits, exclusions, excesses and whether product liability is included in the policy.
Which factors impact the price?
The cost of your cover will depend on factors such as:
The products you make or sell: Products that present a greater risk of injury or damage may cost more to insure.
Your business activities: Manufacturing, importing, modifying and distributing products can involve different risks.
Your turnover: Insurers may use your annual turnover and sales volumes when assessing your exposure.
Where you sell your products: The countries and markets you supply can affect the cover available and the premium.
Your claims history: Previous claims may influence the insurer's assessment of risk.
Your level of cover: A higher indemnity limit or additional cover may increase the premium.
Your policy excess: Choosing a higher excess may affect the price, but it means your business will need to contribute more towards eligible claims.
How does product liability insurance work?
Here’s a step-by-step guide to how product liability insurance works:
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Choose suitable cover
Assess your products and risks, then compare policies, cover limits, exclusions and excesses to find the right protection for your business.
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Report a claim
If a product allegedly causes injury or damage and someone makes a complaint, contact your insurer promptly and provide relevant evidence, following their instructions.
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Insurer assessment and payout
Your insurer checks the evidence and policy terms. If covered, it may pay eligible legal defence costs and compensation, subject to exclusions and limits.
How much product liability cover do I need?
Most UK businesses choose between £1 million and £5 million in product liability cover, though policies can go up to £10 million depending on:
Type of product: Higher-risk products, such as electricals, cosmetics, toys and food, may need higher limits
Contractual requirements: If clients, retailers or local authorities require a minimum level of cover
Policy limits: Whether the limit applies per claim or across the whole policy year, as multiple claims may reduce the remaining cover
Export markets: Selling internationally, particularly in the USA, may require higher limits or specialist cover
What records should I keep in case of a product liability claim?
Keeping accurate product and supplier records can help your business investigate an allegation, establish where a product came from and provide evidence to your insurer.
Depending on your business and the products you handle, useful records include:
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Supplier and import records
Keep supplier details, purchase invoices, import documents and relevant contracts
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Manufacturing and traceability records
Record production dates, batch numbers, serial numbers, components and relevant supply-chain details
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Testing and quality control evidence
Retain inspection reports, test results, quality checks and records of corrective action
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Safety instructions and warnings
Keep copies of product labels, instructions, safety information and any warnings provided to customers
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Sales and distribution records
Maintain information about where and when products were sold or supplied, including relevant customer and distributor records
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Complaints and returns
Record reported faults, customer complaints, returned products and any action taken
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Product changes
Document design changes, modifications, updated components and decisions made in response to identified risks
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Insurance documents
Keep your policy schedule, policy wording, renewal details and relevant correspondence with your insurer
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 and producers | Businesses that make products or components may face claims if a defect causes injury or property damage. |
Own-brand businesses | A business that markets a product under its own name or trademark may be treated as a producer under applicable product liability law. |
Importers | Businesses that import products into the UK for commercial supply may face product liability and product-safety responsibilities. The precise duties depend on the applicable law and the business's role. |
Businesses that modify products | Altering a product, its components or its intended use may create additional risks and affect responsibility for any resulting defect. |
Wholesalers and distributors | Businesses supplying products to other businesses may face liability in certain circumstances and should understand their contractual and legal responsibilities. |
Retailers and online sellers | Selling a product does not automatically make a retailer liable for every defect. However, suppliers can become liable in specified circumstances, including where they cannot identify the appropriate producer or their own supplier when legally required to do so. |
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
A product is made incorrectly or a component fails, causing injury or damage.
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Design defects
Issues in the product’s design that render it dangerous, even if properly manufactured.
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Contamination
A food, cosmetic or other product becomes contaminated and allegedly causes illness or injury.
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Inadequate warnings or instructions
A customer alleges that missing or unclear safety information contributed to an injury or accident.
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Faulty components
A component supplied by another business fails and damages the finished product or other property.
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Improper packaging
Packaging that fails to protect the product or poses a risk to users.
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:
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.
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
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We can do this work for you.
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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
Does product liability insurance cover product recalls?
Not always. Standard product liability insurance is generally intended to cover certain third-party injury, illness and property damage claims caused by defective products. The costs of recalling, withdrawing, repairing or replacing the products themselves may be excluded.
Some insurers may offer product recall insurance or additional recall cover, subject to specific terms and conditions. This may help with eligible recall-related expenses, depending on the policy.
If your business manufactures, imports or sells products that could pose a safety risk, check whether recall cover is available and what costs it includes. Also consider any legal obligations you may have to report a safety issue, withdraw a product or take corrective action.
Is product liability insurance a legal requirement?
Product liability insurance is not a legal requirement for every UK business. However, businesses can still face legal liability for damage caused by defective products, and customers or commercial partners may require insurance under a contract.
Product safety obligations can apply whether or not your business has insurance. Check the requirements relevant to your products, business activities and markets, and review any insurance conditions in your customer or supplier agreements.
What’s the difference between product liability and public liability?
Public liability insurance generally covers certain claims for injury or property damage suffered by third parties in connection with your business activities.
Product liability insurance focuses on claims arising from defective products you make, import, supply or sell.
For example, public liability insurance may respond to a customer injury caused by a hazard at your business premises, while product liability insurance may respond to an allegation that a faulty product caused an injury after purchase.
The precise scope of each policy varies. Some business insurance policies combine public and product liability cover, so check the policy wording to understand what is included.
Do online or e-commerce sellers need product liability insurance?
Product liability insurance may be relevant if you sell physical products online, whether through your own website or a third-party marketplace. Your potential exposure depends on the products you sell, your role in the supply chain and the markets you serve.
Importing products, selling under your own brand or modifying products can create additional responsibilities. A marketplace or commercial partner may also require you to hold a particular level of insurance.
Check your legal obligations, contractual requirements and policy exclusions before deciding what cover you need.
Am I responsible for products I import into the UK?
Importers have their own legal responsibilities for products supplied in the UK. Under the Consumer Protection Act 1987, a person who imports a product into the UK in the course of business for supply can be liable for damage caused by a defective product, subject to the Act's provisions.
This does not mean every importer is automatically treated as the manufacturer for every product safety duty. Responsibilities depend on the applicable legislation, the product and the importer's role.
If you import products, check the relevant product safety requirements and make sure your insurance accurately reflects your activities and potential liabilities.
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.
The condition of the product, any repairs or modifications, the safety information provided and the applicable legal requirements may all be relevant.
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.
Check with the insurer that second hand products and any refurbishment activities are covered before buying a policy.
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 3 Nov 2026 by
Sources and supporting information
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[1]
According to Simply Business data, 51% of customers paid £6.52 or less monthly for a public liability insurance policy with Simply Business. Figure based on annual quotes purchased between 1st July - 30th September 2026.
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[2]
According to Simply Business data, 10% of customers paid £5.05 or less monthly for a public liability insurance policy. Figure based on annual quotes purchased between 1st July - 30th September 2026. The price is for up to £2 million of public liability insurance and excludes the extra costs for paying monthly
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[3]
YouGov Survey 1st July 2025 to 30th June 2026. Net Recommend score derived from "Which of the following online service websites would you recommend to a friend or colleague, or tell them to avoid?" Base: Current Customers of (MoneySuperMarket n=17,883, Compare the Market n=16,193, Go.Compare n=8,523, Confused.com n=7,918, Uswitch n=514)
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[4]
From 01.06.23 to 31.05.24 MoneySuperMarket customers received £1.59bn estimated savings based on (i) SuperSaveClub reward redemptions, and (ii) savings claims per product multiplied by the number of sales. Products included - Car, Home, Pet and Travel insurance, Broadband, Credit Cards, Loans and Mortgages.
