Orlando, Fla. — This holiday season sales were through the roof and you are now enjoying the results of a highly profitable season. Just imagine, if one of the most popular toys or technology devices which contributed most of your success as you were closing this year, ended up malfunctioning and one of your customers resulted injured. The mere possibility of getting sued or a class action lawsuit may give you the chills.
Suddenly, all your profits and all the hard work and effort were vanished away. Certainly not a good start to the New Year!
From prescription drug defects to faulty kitchen appliances, product liability lawsuits seek to hold manufacturers accountable for their dangerous products. Whether they live in a retirement community in Clermont, or while at an theme park in Orlando, every Floridian relies on countless products to make it through the day.
That is the reason why Product Liability insurance exists. This type of insurance product protects the manufacturer, distributor or seller of a product from legal liability resulting from a defective condition that caused personal injury or damage associated with the use of the product. In the other side, Product Recall insurance, is a specialty product designed to cover the costs associated with recalls, and it is also available from some insurers.
Most lawsuits are settled out of court. Of those that are tried and proceed to verdict, Jury Verdict Research data show that in 2013 the median, or midpoint, plaintiff award in personal injury cases was $68,218, down 9 percent from $75,000 in 2012.
Travelers Insurance 2015 Business Risk Index showed that legal liability was the fourth-highest rated worry for business leaders in the United States, down from No. 3 a year earlier. Of 1,210 business leaders surveyed, 56 percent indicated they worry about it somewhat or a great deal.
Businesses address their liability concerns through many types of risk management, of which insurance is an important component. A Swiss Re study indicated that in 2013 the United States had the largest commercial liability insurance market in the world both in premium volume ($84 billion) and as a percentage of Gross Domestic Product (0.50 percent). More than half of all global liability premiums were written in the United States.
Insurers are required to defend their policyholders against lawsuits. The costs of settling a claim are reported on insurers’ financial statements as defense and cost containment expenses incurred. These expenses include defense, litigation and medical cost containment. Expenditures for surveillance, litigation management and fees for appraisers, private investigators, hearing representatives and fraud investigators are included. In addition, attorney legal fees may be incurred owing to a duty to defend, even when coverage does not exist, because attorneys must be hired to issue opinions about coverage. Insurers’ defense costs as a percentage of incurred losses are relatively high in some lines such as product liability and medical malpractice, reflecting the high cost of defending certain types of lawsuits, such as medical injury cases and class actions against pharmaceutical companies.
For example, in addition to $1.2 billion in product liability incurred losses in 2014, insurers spent $953 million on settlement expenses, equivalent to 77.4 percent of the losses.
Every successful business must consider an adequate insurance product or combination of several types of coverage depending on the type of business, to protect the results of hard work and a well though operation. Our expert agents at Garzor Insurance are ready to help you start a great new year and answer your questions to maximize your insurance coverage on this 2018!
Happy New Year!
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