Shop Insurance and Product Liability

Depending on what type of shop you have and what you sell, your shop insurance may need to include product liability.

If you’re selling items that you’ve either made yourself or have imported and then put your name on, you will be responsible for anything that happens as a result of the intended use of the products.

If you are selling from a shop and either weren’t aware of product liability insurance or decided it wasn’t worth the expense, take a look below at some of the consequences of not having this form of shop insurance in place.

  • Being sued by customers

If your products burst into flames when they’re being used or emit toxic fumes, you may well find a line of angry customers with compensation claims gunning for you.

Clearly some types of product are more likely to lead to problems than others such as skincare and electrical items. You’ll need to have product liability insurance in place to protect you financially against these claims.

  • Loss of reputation

With so many social media channels available to people nowadays, it doesn’t take long for bad reviews to travel.

If someone has a problem with one of your products and you don’t handle their complaint well, they may decide to vent their frustration online, causing untold damage to the reputation you’ve worked hard to establish.

  • Loss of business

Loss of your reputation is generally followed by a loss of business. After all, would you gamble with your money if you knew a shop had a history of selling dodgy items?

It can be very hard to recover from a loss of reputation in business and your shop insurance won’t be able to protect you against this.

  • Problems with suppliers

If you are buying a product from a supplier and branding it as your own, not having any product liability insurance in place could lead to problems.

It’s only natural you’d want to stop using a supplier that was sending you faulty goods, but you’d then be faced with having to refund or compensate customers and go to all the hassle of finding another supplier.

You may also want to consider taking your own legal action against the supplier you’ve used, in which case, making sure you have legal expenses cover for this sort of thing in your business insurance policy is crucial.


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