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 Texas, businesses involved in the manufacturing, selling, or distribution of products are exposed to potential lawsuits under product liability law. These lawsuits can be based on various legal theories, such as design defects, marketing defects (including failure to warn), or manufacturing defects. To mitigate the financial risks associated with such claims, businesses often purchase product liability insurance. This insurance is designed to cover the costs of legal defense and any damages awarded if the business is found liable for personal injuries or property damage caused by a defective product. The coverage is crucial for all parties in the product supply chain, including manufacturers, distributors, and retailers, as well as contractors in the construction industry who may face claims related to the use of defective products in their projects. Texas law, consistent with general principles of product liability, holds any party in the supply chain potentially liable for damages caused by defective products, making product liability insurance an important consideration for businesses to protect their financial interests.