What is the difference between product liability insurance and public liability insurance?

In the world of business protection, two terms often cause confusion: product liability insurance and public liability insurance. For jewellery designers, understanding the distinction is essential to ensure the right coverage is in place. This guide breaks down the two policies, explains how they differ, and shows how public and product liability insurance for jewellery designers can work together to safeguard your business.

Introduction: why both protections matter

Running a jewellery design business means you interact with customers, suppliers, retailers, and the general public. Accidents happen, products fail, and allegations of negligence can arise even when you’ve done everything right. Public and product liability insurance for jewellery designers are designed to protect you from financial losses stemming from third-party claims. While they share a common goal, financial protection against claims, they cover different scenarios.

In short:

• Public liability insurance covers injuries or property damage to third parties caused by your business activities or on your premises.
• Product liability insurance covers injuries or property damage caused by a defective product you sold, supplied, or manufactured.

What is public liability insurance?

Public liability insurance (PLI) is designed to protect your business if a member of the public suffers an injury or their property is damaged as a direct result of your business activities.

Key aspects for jewellery designers:

• Scope: Covers incidents that occur on your business premises or during events, shows, or pop-up shops where you interact with customers.
• Third-party claims: Includes injuries to customers, visitors, or suppliers, as well as damage to their property due to your operations (e.g., a crash in a showroom, a visitor slipping, or a display case toppling).
• Legal costs: Often includes defence costs in addition to settlements or judgments.
• Exclusions: Personal injury to employees (covered by employers’ liability), professional advice errors, and defective products are typically not included unless separately purchased.
• Example scenarios: A visitor trips over a display jewellery stand at a craft fair, or a customer sustains a cut from a sharp ring display stand.

What is product liability insurance?

Product liability insurance protects your jewellery business when a product you sold, supplied, or manufactured causes injury or damage to a third party.

Key aspects for jewellery designers:

• Scope: Covers defects in the jewellery items themselves, design flaws, manufacturing faults, or inadequate warnings that lead to harm.
• Third-party claims: Includes customers who experience skin irritation from metals, allergic reactions, or injuries from a broken clasp or sharp edge.
• Legal costs and settlements: Provides coverage for legal defence and any compensation awarded.
• Exclusions: However, some policies may exclude damage to the product itself or require different limits for professional services. It may not cover wear-and-tear or misuse unless specifically stated.
• Example scenarios: A ring with a faulty clasp detaches and injures a customer, or a necklace chain breaks and causes damage to the wearer’s neck.

Public liability vs product liability: side-by-side considerations

• Who is protected:
  • Public liability protects members of the public who are harmed or whose property is damaged by your business activities.
  • Product liability protects customers who are harmed by a defective product you designed, manufactured, or sold.
• What is covered:
  • Public liability addresses accidents and incidents at business premises or during events.
  • Product liability addresses defects in products and associated harms.
• When to rely on each:
  • Public liability is essential for general business operations, storefronts, exhibitions, and customer interactions.
  • Product liability is essential for any jewellery designer who creates, manufacturers, or sells pieces, especially those with components or finishes that could fail.

Why jewellery designers should consider both types

Jewellery design involves materials, finishes, clasps, settings, and sometimes bespoke commissions. Each stage carries risk:

• A customer could trip over a display stand in a showroom or at a market.
• A faulty clasp or chemical reaction in a piece could cause injury or damage.
• An allergic reaction to a metal or plating might lead to a claim.

Having both public and product liability insurance ensures you’re covered for:

• On-site incidents and customer interactions (public liability).
• Defects or faults in the jewellery you sell or manufacture (product liability).

How to assess your insurance needs as a jewellery designer

1. Inventory your activities: Do you sell directly to customers, wholesale to retailers, or both? Do you attend markets or shows?
2. Identify key risks: Trip hazards in a showroom, damaged displays, defective clasps, or allergic reactions to metals.
3. Check policy details: Look for coverage limits, per-claim and annual aggregate limits, and whether your policy includes defence costs.
4. Consider combined policies: Many insurers offer combined or package policies that include both public and product liability with bundled premiums, which can be cost-effective.
5. Review exclusions: Pay attention to what is not covered, such as professional indemnity for design advice, or coverage gaps for certain materials or bespoke orders.
6. Seek specialist advice: Jewellery designers may benefit from insurers who understand fashion, craft, and retail environments, and who can tailor coverage to your business model.

How to implement effective coverage

• Obtain separate limits or a combined limit that aligns with your risk exposure. For example, a policy could offer £2 million public liability and £2 million product liability, or a combined £3 million cap.
• Ensure defence costs are included: Legal costs can be significant. Confirm that your policy covers both claims and defence.
• Keep accurate records: Photograph displays, maintain safety checks, and document bespoke commissions to support claims if needed.
• Update coverage as you grow: If you expand to new markets, hire assistants, or launch new lines, re-evaluate limits and exclusions.

Distinguishing between public liability insurance and product liability insurance is essential for jewellery designers who want robust protection without gaps. Public liability covers the everyday risks of interacting with customers and the public, while product liability protects you from claims arising from defects in the jewellery you design, manufacture, or sell. For jewellery designers, a well-rounded approach often means securing both types of coverage, or opting for a combined policy that addresses both areas.

Ultimately, the right insurance posture gives you confidence to showcase your artistry, take on commissions, and grow your brand. If you’re unsure about the specifics, consult with a specialist who understands public and product liability insurance for jewellery designers, and tailor a policy that fits your business model and risk tolerance.

Public and Products liability cover is available to GoJD and BPA members and included in Gold Plus memberships.