Product liability insurance is typically required for businesses that produce or sell products. If you are selling products, product liability insurance can help cover legal costs and damages that may result from a faulty product. If you are producing products, product liability insurance can help cover the cost of recalls and lawsuits. Product liability insurance can also protect you from damage to your reputation resulting from a faulty product. Product liability insurance is usually required both by law and by contract, and it can have an impact on your business’s overall cost of operation.