Insuring Unusual Products: A Guide for Decorated Phone Cases
Decorated phone cases, often referred to as 'decoden,' are highly specialized products that can pose unique challenges in terms of product liability. If yoursquo;re selling these items, you might wonder, lsquo;What types of insurance should I consider?rsquo; This guide will help you understand the best options for insuring your decoden products, with a focus on product liability insurance.
Overview of Product Liability Insurance
Product liability insurance, as the name implies, is designed to protect you and your business from legal actions that may arise from injuries or damages caused by your products. Unlike traditional property insurance, it does not cover the physical product but instead provides financial protection if someone is injured or damaged by the product during its use.
Understanding the Types of Insurance Needed
General Liability Insurance
You may already be covered under a general liability policy, such as the one yoursquo;ve mentioned with Auto Owners Insurance for about $400 annually with a $1 million limit. However, this policy may not fully address the specific risks associated with your decoden products. Itrsquo;s designed to cover various types of incidents, such as slip and falls, slips on the road, and third-party damages. For your unique situation, you may need to explore more specific coverage options.
Products and Completed Operations (PCO) Coverage
The portion of an insurance policy that covers damage or bodily injury caused by your product is called Products and Completed Operations (PCO) coverage. This is particularly important for products like your decoden cases. For example, if a fault in your phone case causes damage to a userrsquo;s clothing, PCO coverage might come into play. If a child is injured while using the case, parents might sue you for damages. This coverage is designed to protect your business from liabilities arising from such incidents.
Specific Considerations for Decoden Cases
Your decoden cases contain sharp resin pieces and silicone, which may make them more susceptible to causing injury. Itrsquo;s crucial to understand that insurance companies typically do not cover products that are inherently dangerous when used as intended. This is because insurance companies rely on the principle of the law of large numbers to calculate risk, and they find it difficult to quantify the risk associated with items like your phone cases.
Itrsquo;s important to note that an independent insurance broker can help you navigate these complexities. They can provide a more tailored recommendation based on the specific risks and characteristics of your product. Additionally, you need to work closely with such a broker to ensure that your insurance policy comprehensively covers any potential liabilities.
Steps to Take
Seek Professional Advice
The first step is to meet with an independent insurance broker. They can help you understand the different types of insurance available and the coverage they provide. Discuss your specific needs and the unique aspects of your decoden products. This will help you get the most appropriate coverage for your business.
Evaluate Your Product Risks
Take a close look at your productrsquo;s potential risks. If your decoden cases can snag on clothing or hurt a child, you need to understand how this risk can be mitigated. This includes understanding the productrsquo;s design, material usage, and distribution processes. This comprehensive risk assessment can help you tailor your insurance policy to cover the specific hazards posed by your product.
Consider Additional Endorsements
In some cases, additional endorsements or riders may be necessary to fully protect your business. For instance, if you want to increase the limits of your PCO coverage or add specific language to cover unique circumstances, an endorsement might be necessary.
Conclusion
Insuring unusual products like decoden cases requires a thorough understanding of the risks involved and a strategic approach to insurance. By working with an independent insurance broker, you can get the best coverage for your business and customers. Remember, the key is to be proactive and ensure that your insurance policy is tailored to your unique product and its potential risks.