The Relationship Between Product and General Liability
Product liability is not typically a separate policy — it's a coverage component within your commercial general liability (CGL) policy. Specifically, product liability is part of the "products-completed operations" coverage in a standard CGL.
What this means practically: if you manufacture, sell, distribute, or serve a product that causes bodily injury or property damage, that claim falls under the product liability coverage within your CGL policy.
For most small businesses, the key question isn't "do I need product liability in addition to general liability" — it's "does my CGL policy include adequate products-completed operations coverage for my specific business."
What Product Liability Covers
Product liability covers claims arising from products your business makes, distributes, or sells:
- •A customer is injured using a product you manufactured
- •A food item you served caused illness
- •A product you sold was defective and caused property damage
- •A component part you made failed in a larger product, causing injury
These claims can arise long after the product was sold — which is why the coverage is bundled with "completed operations" that also covers post-project claims for service businesses.
Who Especially Needs to Pay Attention
Manufacturers in Southeast LA County: If you're producing products that go to distributors or retailers, your buyers will often require proof of product liability coverage as a condition of purchase. Standard CGL policies include this, but limits matter. If your products have significant injury potential, confirm your limits are adequate.
Distributors and importers: Companies that import products and resell them in the US carry product liability exposure for those goods even if they didn't manufacture them. Courts have held distributors liable when foreign manufacturers are unreachable.
Food businesses: Restaurants, food trucks, caterers, and food manufacturers face product liability exposure from every item they serve or sell. Foodborne illness claims fall under product liability coverage.
Retailers: Selling a product that injures a customer creates product liability exposure for the retailer even if they didn't manufacture it. Most retailers are protected by their CGL policy, but it's worth confirming coverage applies to the products you sell.
When You Might Need a Standalone Product Liability Policy
For most small businesses, the product liability coverage within their CGL policy is sufficient. But some situations warrant a standalone policy or higher limits:
- •High-volume manufacturers with national or international distribution
- •Businesses making products with significant injury potential (tools, chemicals, medical devices)
- •Businesses where retailers or distributors contractually require separate product liability limits
- •Companies facing claims that exhaust standard CGL aggregate limits
A standalone product liability policy can provide higher limits than a bundled CGL allows, and can be written specifically around your product category and distribution volume.
The Short Answer for Most Businesses
If you're a small manufacturer, retailer, food business, or distributor in Southeast LA County, your standard CGL policy very likely includes the product liability coverage you need. Confirm with your provider that the products-completed operations coverage applies to your specific products, and verify that the aggregate limits are adequate given your sales volume and the nature of what you sell.
If you're scaling, distributing nationally, or making products with significant injury potential, a coverage review is worth doing before you find out the hard way that your limits weren't enough.
