Product Liability Insurance
Product liability insurance covers harm the product causes, a gate marketplaces and retail buyers check, not just a hedge.
What product liability insurance is
Product liability insurance is coverage for when the product itself causes harm: injury or property damage traced to something you sold, with the policy paying the legal defense and settlements a claim brings.
Why product liability insurance matters
Selling physical goods means owning what they do after delivery, and in most markets everyone in the chain, maker, importer, brand, seller, can be named in a claim. For D2C brands it’s also a gate, not just a hedge: large marketplaces require sellers past certain sales volumes to carry coverage and name the platform, and retail buyers ask for the insurance certificate before the purchase order, right next to the line sheet.
What founders actually need to know
- Coverage shape: per-occurrence and aggregate limits sized to category risk
- The certificate: retailers and platforms request a COI naming them as additional insured
- Category reality: ingestibles, topicals, electronics, and kids’ products price higher for a reason
- The paper trail: batch records, inspections, and warnings are the defense the policy funds
Frequently asked questions
When should a D2C brand get product liability coverage?
Before the product ships at meaningful volume, and immediately when a marketplace threshold or a retailer’s vendor requirements demand it: the certificate takes days when everything’s ready and stalls deals when it isn’t. Waiting for the first incident is the one timing that never works.
Does contract manufacturing shift the liability to the factory?
Not from the customer’s view: the brand on the label gets named regardless of who ran the machines. Supplier agreements and the factory’s own coverage can shift costs behind the scenes, but the brand still needs its own policy standing in front.