What does "product liability" insurance cover?

Product liability insurance specifically addresses claims that arise from injuries or damages caused by products sold or supplied by a business. This type of coverage is essential for manufacturers, wholesalers, distributors, and retailers, as it protects them from the financial repercussions of lawsuits resulting from product defects, inadequate warnings, or failures in design that lead to harm or loss.

In understanding product liability, it is important to recognize that the insurance responds to claims made by consumers or other parties who have suffered damages due to the use of the product. This coverage can encompass a wide range of issues, including physical injuries, property damage, and even economic losses related to a defective product.

Other choices focus on different types of coverage: employee injuries fall under workers' compensation insurance, business property losses are covered by property insurance, and transport-related claims might be covered under cargo insurance. Each of these types of insurance serves distinct purposes and does not overlap with the specific functions of product liability insurance. Thus, the focus of product liability insurance on products directly ties into the protection it offers businesses against related claims, making it the relevant answer to the question.