Product Liability Insurance for the Sports and Fitness Industry

Product Liability Insurance for the Sports and Fitness Industry
December 6, 2018 Andrew Riordan

The sports and fitness industry is a rapidly growing and changing industry with new products being introduced to the marketplace each and every day.  Oftentimes these products are unfamiliar to insurance carriers and underwriters making it important to use a broker that specializes in the sports, fitness and outdoor product industry.

By definition, Product Liability Insurance offers coverage that protects manufacturers, product suppliers, product distributors, importers, and product retailers when claims are made for injuries and damage incurred in the use of their goods or products. Product liability insurance covers any liability of a manufacturer or others in the chain of commerce of a product where bodily injury or damage to some other property is caused by a product defect.  The statute of limitations ranges depending on the state in which the item was manufactured and where the claim occurred in.

Some important factors to take into consideration when purchasing product liability insurance.  Is the policy written on a claims made or occurrence basis? Occurrence-based product liability policies are superior due to there being less likelihood of a gap in coverage.  What is the retro date which means how far back coverage goes?  Is there product recall or product recall expense coverage?  Sometimes product liability policies will have a sublimit of this type of coverage in them.

Cost for product liability policies vary quite a bit depending on what type of product you are manufacturing and if you have had claims in the past.  Most policies are rated based on sales revenue per $1,000 of sales.  Example Surfboard Manufacturer that does $2,000,000 in sales rate is $2.00 per $1,000 so premium would be $20,000.

Often times retailers, distributors, wholesalers, and product suppliers think that they are not liable in the event that a product they sell/distribute etc.… is defective and causes bodily injury or property damage.  This is not the case as it depends on the contract with the manufacturer or if the manufacturer even has product liability coverage.  If a manufacturer does not have product liability insurance in place then anyone that had a part in bringing the product to the consumer could be held liable.

We have insured clients that range from surfboard shapers, sports drink manufacturers, to balance board manufacturers so if you have a product that needs to be insured make sure and contact us today.

Also if you are unsure if you have a product liability exposure please contact us so that we can give you a free consultation on the possible exposures that you might have.

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