What's the Difference Between Public and Product Liability?

Liability insurance protects businesses from claims of injury or damage. However what’s the difference between public and product liability? There’s often confusion between the two, and understanding the difference is crucial to make sure your business is protected.

Exploring public liability insurance

Public liability insurance covers legal defence costs and compensation for injury or property damage to third parties. Its purpose is to protect businesses from financial losses due to accidents caused by their activities.

Accidents could include things like a customer slipping in a store or a passer-by sustaining an injury from falling signage. This insurance can be beneficial for many industries like retail, restaurants and construction. It can also prove useful for service providers like electricians and plumbers.

Any business that has regular interaction with the public should consider public liability insurance. It can help greatly in safeguarding against unforeseen legal costs.

Understanding products liability insurance

Product liability insurance protects businesses from financial risks associated with product-related incidents.

Common claims involve physical harm or property damage due to faulty goods. This could be something like a malfunctioning appliance causing a fire or a contaminated food product causing illness.

Manufacturers, distributors and retailers could all see great benefit from product liability insurance. Your business can be held responsible for product defects at any point. Product liability insurance can help to protect against any significant financial and reputational damage.

Comparing public liability and products liability

Public liability insurance covers injuries or property damage to third parties on business premises or due to business operations.

Products liability insurance meanwhile protects against accidental injury or property damage claims arising from the sale, supply, repair or manufacture of defective products causing harm.

Legal defence claims for public liability will involve negligence in maintaining safe premises, while products liability will protect you from the supply or manufacture of defective goods which cause injury to the public or accidentally damage their property. Note some policies will exclude cover if the design is defective or does not include sufficient instructions.

Having both public and product liability insurance means your business will be better prepared to tackle any unforeseen accidents. Protecting your business from multiple angles can result in reduced financial risk, while also better protecting your business' reputation.

How to determine your business's insurance needs

When deciding between public and product liability insurance, you should fully assess your business's nature, activities and risk exposure. Consider the safety of your products. Note any potential hazards in your operations and the likelihood of accidents involving your customers or members of the general public.

It’s wise to conduct thorough risk assessments and seek advice from insurance professionals to tailor coverage to your specific needs. For businesses engaged in both manufacturing and selling, combining both insurances offers even better protection against issues from operations and products.

Public liability insurance and product liability insurance from Towergate

Public liability insurance offers protection against injury or property damage due to business activity, while product liability insurance covers harm caused by faulty products. Tailored solutions for your business are important. As are regular policy reviews and proactive planning. Ensure your coverage remains sufficient as business activities change.

Consider your business needs carefully. Factors like the nature of products, operations and potential liabilities need to be taken into account.

If you’re in need of extra protection, we offer both public liability and product liability insurance.

Get a public liability insurance quote 

Contact us for a public liability insurance quote today, either online or by phone on 0330 818 9929.

Get a product liability insurance quote 

Get in touch with Towergate for a product liability insurance quote today, either online or by calling 0333 060 2446.

About the author

Alison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.

The information contained in this article is based on sources that we believe are reliable and should be understood as general information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such.