What does "product liability insurance" protect businesses against?

Product liability insurance is specifically designed to protect businesses against claims arising from injuries or damages caused by their products. This type of insurance is crucial for companies that manufacture, distribute, or sell products, as it covers the legal costs and settlements that may arise if a product malfunctions or causes harm to a user.

The focus of product liability insurance is on the direct consequences of a product being unsafe or defective, which aligns perfectly with the responsibilities companies have towards consumers. This coverage allows businesses to mitigate the financial risks associated with potential lawsuits linked to product-related injuries, ensuring they can manage the costs of legal defense and compensation claims if necessary.

While other options mention legitimate concerns such as environmental issues or theft, they fall outside the specific scope of protection that product liability insurance provides, which is primarily about compensating for harm caused directly by the products themselves.