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Products liability insurance

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How much does products liability insurance cost?

The cost of products liability insurance in New Zealand typically averages between $30 – $60 per month. Several factors determine the overall price, including the industry sector, the types of products, risk management practices, and the claims history.

What is the average cost of products liability insurance? 

Businesses in New Zealand typically pay between $30- $60 or around $500 annually for their products liability insurance.

It is important to note that products liability is often included with public liability insurance. This can make the cover very cost effective for small and medium sized businesses. 

Understanding Products Liability Cost Factors

There are three key factors that insurers take into consideration when calculating your products liability insurance premium:

Industry and Product Risk

The kind of product your business sells can directly affect the cost of insurance. Industries that have a high potential for causing damage or injury, such as construction or pharmaceuticals, will typically have higher premiums than businesses in low-risk industries like apparel or furniture.

Business Size and Revenue

The size of your business and its revenue also plays a significant role in determining the insurance cost. Larger businesses or those with high revenues are often seen as posing a higher risk due to the sheer number of products they distribute. Consequently, their insurance premiums will likely be higher.

Claims History

If your business has a history of insurance claims related to product liability, it may indicate a higher risk to insurers. Companies with frequent claims might see increased premiums, whereas those with a clean claims history may enjoy lower rates.

Products liability provides cost-effective protection for your business

Products liability insurance provides cost-effective protection for your business by safeguarding you against claims arising from damages or injuries caused by your products. Here are three ways it benefits businesses:

Financial Protection

If your business is held liable for damages or injuries caused by a faulty product, the costs can be crippling. Products liability insurance protects your business from these unexpected financial burdens, ensuring you’re covered for legal fees and compensation payments.

Preserving Reputation

In the event of a product liability claim, your business’s reputation can take a hit. Having proper insurance not only provides financial cover but also allows you to handle any claims efficiently and professionally, minimizing harm to your business reputation.

Peace of Mind

Lastly, knowing that your business is protected against potential product liability claims provides peace of mind. This assurance enables you to focus on running and growing your business without the constant worry about potential lawsuits.

It’s crucial to have products liability insurance if:

  • You manufacture or sell physical products.
  • Your products are sold internationally.
  • You operate in high-risk industries.
  • Your business is growing rapidly.

How can you save on products liability insurance?

Saving on products liability while ensuring adequate protection for your business is achievable.

Risk Management 

Implementing an effective risk management strategy can help lower your premiums. This includes ensuring your products meet safety standards, providing clear instructions for use, and regularly testing and inspecting your products.

Choose a Suitable Deductible

The deductible is the amount you’re willing to pay out of pocket before your insurance kicks in. Higher deductibles typically lead to lower premiums, but be sure you can afford the deductible in the event of a claim.

Engage our products liability insurance brokers at Gerrards

Here at Gerrards, we know the ins and outs of products liability insurance. Our team of insurance brokers is equipped to guide you through the process of selecting the most suitable and affordable insurance policy. We have an extensive network of insurance providers, and our job is to negotiate on your behalf, compare offers, and secure the best rates for you.

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