If your Florida business manufactures, imports, wholesales, distributes, or retails any product — from handmade crafts to imported goods to food items — you face product liability risk. A defective product that injures a customer can result in a lawsuit that exceeds your general liability limits or contains exclusions for product-specific claims. Understanding product liability coverage — and where GL ends and product liability begins — is essential for any Florida product business.
Product liability coverage protects your Florida business against claims that your product caused bodily injury or property damage due to: (1) Manufacturing defects — an error in how the product was made (e.g., a contaminated food product, a faulty component); (2) Design defects — an inherent design flaw that makes the product dangerous (e.g., a children's toy with a choking hazard); (3) Marketing defects (failure to warn) — inadequate warnings or instructions about proper use. All three can expose Florida product businesses to significant liability.
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Standard commercial general liability policies include 'products and completed operations' coverage — covering injury or damage caused by your products after they leave your hands. For most small Florida businesses with standard products, this GL component provides adequate product liability protection without a separate product liability policy. However: if your product has unusual risk profiles, your GL has low limits, or your product has caused prior claims, a separate or excess products liability policy may be appropriate.
Florida's large e-commerce community faces product liability exposure that may be underappreciated. Amazon's marketplace policies now require sellers with more than $10,000/month in revenue to carry commercial liability insurance naming Amazon as additional insured. Sellers who dropship or import products from overseas take on liability as the 'importer of record' under US product liability law — you can be sued as if you manufactured the product, even if you didn't. E-commerce sellers should verify GL policy covers online sold products and, if selling on Amazon, meets the marketplace's coverage requirements.
Food product liability is particularly risky in Florida — a state with heavy tourism, food service, and food manufacturing activity. Contaminated food products can result in multi-plaintiff lawsuits if a recall occurs. Florida's cottage food law allows home-based food producers to sell certain products without a food establishment license, but does not exempt sellers from product liability. Food producers should carry product liability with recall expense coverage — covering the cost of retrieving and disposing of contaminated products, which can easily exceed $100,000 for a recall.
Florida businesses that import products from China and other countries and sell them under a private label or house brand bear product liability as the importer. US courts can hold the importer responsible for defects even when the manufacturing was overseas and beyond the importer's control. Importers should: (1) Require product liability coverage from overseas manufacturers; (2) Carry adequate GL with products coverage; (3) Maintain quality control documentation; (4) Keep product records allowing rapid traceability in a recall scenario.
We help Florida product businesses — from e-commerce sellers to food producers — find the right product liability coverage.
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