What Business Insurance Exposures do Distributors Face?

What Business Insurance Exposures do Distributors Face?

Distributors can be subject to a wide array of laws and regulations that govern product liability. Body injury and property damage losses could arise from the product itself, the product packaging, instructions for use, labels, warnings, or other “on product” messages.

The manufacturer is actually the entity that would typically be held responsible for injury arising from a defective product, since the distributor doesn’t have control over the design, assembly or quality of the item. However, distributors could still be held liable for product defects under certain circumstances, including:

  • If they provide installation, service, or repair work as a “value-added” for their customers and there is a problem.
  • If the distributor modifies, repackages, or re-labels products.
  • If they import products from a foreign manufacturer who does not carry U.S. product liability coverage.
  • If the distributor has damaged the product while repackaging, or by making product modifications and had knowledge of this damage, and;
  • If a distributor recommended an unsuitable product for the purpose.

It’s important for distributors to be familiar with the federal and state laws and regulations that impact product liability. The damages awarded in product liability claims include medical costs, compensatory damages, economic damages, and possible attorney’s fees, costs, and punitive damages.

At Newman Crane, we understand the unique exposures that distributors face, from the distribution of beer from breweries to construction equipment. Our specialists will create a Business Insurance package tailored to the specific needs of your company. Please contact us today at (407) 859-3691 for more information.