If a business manufactures, sells, or distributes products, it may want to purchase product liability insurance to protect against loss due to liability for personal injuries and property damage alleged to have been suffered by someone who used or was affected by a product.

Any business in the product supply chain—a manufacturer, distributor, or retailer—may be sued on one or more legal theories generally known as product liability—including the defective design of a product (design defect); the defective marketing of a product (marketing defect or failure to warn); or the defective manufacturing of a product (manufacturing defect).

Product liability insurance is also purchased by manufacturers, suppliers, and contractors in the construction industry to protect against claims that a product used in a construction project was defective.

In North Carolina, businesses involved in the manufacturing, selling, or distribution of products should consider purchasing product liability insurance as a safeguard against potential lawsuits. Product liability refers to the legal responsibility that these businesses may bear if their products cause injury or property damage. Claims can arise from various issues, such as design defects, marketing defects (including failure to warn about potential risks), or manufacturing defects. Product liability insurance can provide coverage for legal fees, settlements, and court-awarded damages. While not mandated by law, this type of insurance is a prudent investment for businesses to protect their financial interests, especially given that North Carolina's product liability laws can hold any party in the product's supply chain accountable for damages. This includes parties involved in the construction industry, where products used in construction projects may also be subject to defect claims.