Product liability insurance covers incidents where a product causes harm or damage due to defects, malfunction, or failure to perform as intended. This includes design defects (inherent flaws in the product’s blueprint), manufacturing defects (errors during production), and marketing defects (inadequate instructions or warnings). It protects businesses if a product causes bodily injury, property damage, or illness to a consumer or third party. For example, if a customer is injured by a faulty appliance or suffers an allergic reaction due to incorrect labeling, product liability insurance can cover legal defense costs, medical expenses, settlements, and court-ordered judgments. It also applies to products sold, manufactured, or distributed by the business. This type of insurance is essential for manufacturers, retailers, wholesalers, and distributors, as it helps manage financial risks associated with product-related lawsuits and claims, even if the business was not directly responsible for the defect but is part of the product’s supply chain.