Many sellers weigh both "should I buy product liability insurance" and "should I get testing and certification" at the same time. This article covers how the two relate, so you understand what each one actually does.
Testing and Insurance Solve Different Problems
- Testing and certification: this is "prevention" — verifying the product meets safety standards to reduce the likelihood of an actual safety hazard
- Product liability/recall insurance: this is a "safety net" — if a product issue causes consumer harm or requires a recall, insurance covers part of the financial loss
The two aren't substitutes for each other — they're different links in the risk management chain.
Does Testing Status Affect Insurance Terms
It depends on the insurer's underwriting policy, but as a general matter, a product that has already passed certification from a reputable third-party testing body usually helps an insurer assess risk more accurately, potentially offering an edge in underwriting efficiency or rates. Conversely, without any testing records, the insurer may require additional risk assessment. It's worth confirming specific terms directly with the insurer.
Can You Just Buy Insurance and Skip Testing
From a compliance standpoint, testing and certification are often a prerequisite for a product to legally go to market in the first place (platform-required compliance documents, mandatory certifications in the destination country) — it's not an optional item you can skip by "just buying insurance instead." Both need to be in place together.
Frequently Asked Questions
Q: If I've done testing and certification, do I still need insurance? A: Yes — testing and certification reduce the likelihood of the product itself having an issue, but they can't eliminate risk entirely. Insurance remains an important safeguard for unexpected situations.
Q: Will a recall insurance claim require a test report? A: It depends on the policy terms, but keeping complete testing and certification records generally helps the claims process go more smoothly — it's worth keeping the relevant documents on hand.
If you'd like to know what testing your product needs, reach out to us and we can help you put together an initial checklist.