Importers and wholesalers play a vital role in the supply chain, but with that comes exposure to potential liability. If a product causes harm, legal responsibility may not always rest with the original manufacturer. UK law can hold other parties accountable, particularly where overseas producers are involved.
In this article, we explore who could be held legally responsible, why product liability insurance may be considered, and how importers and wholesalers might protect themselves against claims.
What Is Product Liability Insurance?
Product liability insurance is designed to help cover the cost of claims made against a business for injury or damage caused by products it has supplied. This might include legal defence costs, compensation, and associated expenses.
Cover may be particularly important for:
- Importers of goods manufactured outside the UK
- Wholesalers and distributors who sell on to retailers or end customers
- Rebranders or those who modify goods before resale
Who Could Be Held Liable?
Under the Consumer Protection Act 1987, liability is not restricted to the original manufacturer. If a product is defective and leads to injury or damage, any party involved in placing it on the UK market may be pursued.
This could include:
- The importer, especially if the product is brought in from a non-UK source
- The wholesaler supplying to retailers or trade buyers
- The own-brand supplier that applies branding or modifies packaging
- The UK-based business acting as the final responsible party when the original manufacturer is unidentifiable or located overseas
Even if a wholesaler or importer did not directly cause the issue, legal and financial responsibility may still arise, particularly if negligence is alleged or the product fails safety standards.
Why Importers Face Higher Exposure
For businesses importing from outside the UK, risk can increase due to:
- Limited legal recourse against foreign manufacturers
- Language barriers or unclear contractual terms
- Lack of overseas product safety compliance
- Minimal or no product testing
If a customer or third party suffers loss, they may pursue the importer as the first identifiable link in the chain. This is especially common where the foreign manufacturer cannot be traced or lacks UK representation.
What Could Go Wrong Without Cover?
Product-related claims can be complex and costly. Common examples include:
- Electrical appliances that cause injury or fire
- Food products linked to allergic reactions or contamination
- Toys or equipment causing physical harm due to faulty parts
If a claim is made, the importer or wholesaler could be expected to cover:
- Legal representation and court costs
- Compensation for injury or property damage
- Testing or product recall costs
- Reputational harm and commercial disruption
Without product liability insurance, these costs may be absorbed directly by the business, potentially impacting financial stability.
Arranging Product Liability Cover
Importers and wholesalers may choose to arrange cover that:
- Includes protection for third-party claims
- Covers goods sourced from international suppliers
- Reflects the nature, volume, and risk of the products handled
Some brokers help identify suitable policies for those working across multiple sectors or sourcing from high-risk regions. Where products are own-branded or repackaged, additional considerations may apply.
Supporting Business Relationships
Having product liability insurance in place can also support supplier relationships. Retailers, trade buyers and commercial clients may request evidence of cover before entering into contracts. In competitive markets, proof of insurance can serve as a mark of due diligence and professional standards.