What type of liability insurance protects against damages caused by products manufactured or sold by the insured?

• A. Public Liability Insurance
• B. Professional Liability Insurance
• C. Product Liability Insurance
• D. Employers Liability Insurance

Answer: (C)

Product liability insurance is specifically designed to protect businesses against claims of damage or injury caused by products they manufacture, sell, or distribute. This type of insurance covers a variety of risks associated with product defects, including design defects, manufacturing defects, and marketing defects (such as inadequate warnings or instructions).

When a product causes harm or damage, a consumer can seek compensation from the manufacturer or seller, which is where product liability insurance comes into play. It provides financial protection for legal fees, settlements, and judgments that may arise from such claims, ensuring that businesses are not financially devastated by lawsuits related to their products.

In contrast, public liability insurance generally covers injuries to third parties or their property but does not specifically focus on products. Professional liability insurance pertains to errors or omissions in professional services rather than physical products. Employers liability insurance protects employers against claims from employees related to workplace injuries, and it does not cover product-related issues.