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    1. Free_rob is offline

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      #1

      Do I need product liability insurance as a wholesaler?

      I am relatively new to this forum and haven’t posted much, but I have been reading a lot. I am posting today to see if someone can explain product liability insurance to me.

      As a wholesaler, do I need product liability insurance? I am not manufacturing the product so I do not really see the need for coverage. However, I have seen others on this forum strongly encourage taking out an insurance policy.

      What are the benefits of having product liability insurance? I am trying to weigh out the pros and cons.
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    2. CWayCross is offline

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      #2
      Please remember that while these forums are good for wholesalers to discuss suppliers, pricing, shipping and even business structure it is always a good idea to speak with a professional before making certain decisions – insurance being near the top of the list.

      I say this because product liability insurance is a very important business decision for a wholesaler.

      Before deciding whether to open a policy or decide against insurance you should know all the facts, and the best place for that is an insurance agent

      That said, let’s talk about product liability insurance .

      In simple terms, product liability insurance is coverage for you in a situation whereby the item sold by you causes harm/damage/loss to the buyer.

      Picture this: You sold 100 televisions to a retailer and they in turn found individual customers to sell them to. The customer uses the TV and leaves it on overnight within the first few days of owning the television. While the owner is asleep, the television catches fire and causes substantial damage to the buyer’s home. As a link in the supply chain, it is up to you to guarantee the product will not cause harm/damage/loss.

      While the manufacturer and retailer will also share the responsibility, that does not lift your burden.

      This is why I suggest having product liability insurance because it at least offers you coverage (both legally and financially); however, do not fall into the trap thinking that insurance provides an unimpeachable safety net.

      Product liability insurance does not cover every instance. For example, it doesn’t cover:

      • Manufacturer defect
      • Design defect
      • A failure to warn (this could be something as simple as a missing label)

      While a product liability policy may not cover every circumstance, I find it better to at least attempt to cover yourself and your business.
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    3. Billy777 is offline

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      #3
      Nice explanation above. One of the first things I did when establishing my business was taking out a product liability insurance policy.

      For the policy, you will have to tell the insurance company what type of product you are dealing with and also report the volume of sales. This and other factors go into the cost of the policy.

      The more you sell, the more the chances of someone filing a claim, which means the cost of your policy will increase.

    4. Silvia 114 is offline

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      #4
      Vote YES to product liability insurance

    5. Biglister is offline

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      #5
      ha ha vote NO to product liability insurance there are too many loopholes in the policies I’ve read. I have the bare minimum coverage because I don’t see any benefits for online traders.

      My business includes secondhand products, and I know that I have no coverage because secondhand products are rarely covered by product liability insurance.

    6. Free_rob is offline

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      #6
      Wow lots of good feedback thanks everyone! I am going to make an appointment to speak with my insurance agent about product liability insurance.

      Thanks for all the help. I can definitely see the plus side of having insurance.

    7. Silvia 114 is offline

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      #7
      Well even though product liability insurance may seem like a waste to some, I assure you if you ever get sued you’ll would be glad to have coverage; even if it is the bare minimum.

    8. huntssman is offline

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      #8
      hmm, now I read the first response I believe it was and it said that you need insurance because if you sell it to the retailer and he sells it to individuals and something happens its going up the chain to the supplier ?

      Why is that, It seems to me that if im a supplier and sell to a retailer and then something happens then the retailer can sue. Otherwise if the retailer sells to individuals and something happens shouldnt the retailer have insurance as well ?

      Im not a wholesaler but looking to get started buying from wholesale and reselling the items and was wondering if I need insurance.

    9. customsesq is offline

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      #9
      I would also recommend that you speak to an attorney who focuses their practice on litigating products liability claims. They will be able to tell you whether spending money on liability insurance is worth it depending on what types of products you deal in.

    10. importexportcourse is offline

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      #10

      Quote:

      Originally Posted by Free_rob View Post
      I am relatively new to this forum and haven’t posted much, but I have been reading a lot. I am posting today to see if someone can explain product liability insurance to me.

      As a wholesaler, do I need product liability insurance? I am not manufacturing the product so I do not really see the need for coverage. However, I have seen others on this forum strongly encourage taking out an insurance policy.

      What are the benefits of having product liability insurance? I am trying to weigh out the pros and cons.

      A premium is a drop in the ocean compared to a potential suit against you, in any case I would strongly advise you get one even as a wholesaler, if the products are faulty the retailer goes after the wholesaler! (in theory you would go after the importer too) but that's a perfect world scenario assuming the importer is still around and hasn't exported themselves to a south American country


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