As a distributor, do I need products liability coverage?

We recommend that distributors purchase their own products liability insurance policies.  If a distributor is required to repackage or install a product, or if the distributor provides training on the use of the product, the distributor may have a potential exposure that is not typically covered under the manufacturer’s policy.  Furthermore, independent acts of negligence on the part of the distributor typically would not be covered under the manufacturer’s policy or by contractual indemnification agreements. A U.S. distributor that imports products from a manufacturer located outside of the United States should be aware that the foreign manufacturer’s policy may not provide coverage in the U.S. or may not provide coverage for the defense of claims in the U.S., which could become very costly. 

Medmarc’s Risk Management Department has published an article that explains distributor risks. The article is titled, “Why Distributors May Be More  Vulnerable to Products Liability than They Realize,” and it is available on Medmarc’s website in our Publications Page.