What is product liability insurance and does my Ontario business need it if I sell physical goods?

Product liability insurance covers claims that a product your business manufactured, distributed, or sold caused injury or property damage to someone who used it — a defective design, a manufacturing flaw, or inadequate warnings are the typical grounds for this kind of claim. If your business makes, imports, distributes, or even just resells physical goods, you can potentially be named in a claim even if you did not manufacture the product yourself, since liability can extend along the supply chain, which makes this a meaningful risk for retailers and distributors, not just manufacturers.

Product liability coverage is sometimes included as an extension within a commercial general liability policy and sometimes needs to be purchased separately, so check whether your existing CGL policy actually includes it, and at what limit, rather than assuming it is automatically covered. The right amount of coverage depends on the nature of the product, the potential severity of harm if something goes wrong, and the markets you sell into — a business selling children's products or anything safety-sensitive generally faces higher exposure than one selling low-risk goods. Reviewing your specific product risk with an insurance broker is the practical next step.