Why it matters for your company
Claims come from three directions: a design defect, a manufacturing defect, or a failure to warn. Every company in the chain can be named, so the component supplier, the contract manufacturer, the integrator and the company whose name is on the unit all meet in the same suit.
Early hardware companies hit two problems. Some policies exclude prototypes or products not yet sold commercially, which leaves demo units and pilot hardware in an awkward place (specialty broker's deep tech page, accessed 2026-09-12). And customer contracts ask for indemnity for product claims, which the policy covers only as far as its contractual liability wording reaches.
Related terms
- Products and completed operationsThe part of general liability that covers injury or damage caused by a product after it leaves your hands, or by work after you have finished it. It usually carries its own aggregate limit.
- Contractual liabilityLiability you take on by agreeing to it in a contract, most often through an indemnity clause that makes you pay for a customer's losses. Policies respond to some of it and exclude the rest, so the clause and the form have to be read together.
- Bodily injuryPhysical harm, sickness or disease to a person, including death that results. It is one of the two triggers of general liability, with property damage as the other.
- ExclusionA clause that removes a type of loss, activity or property from what a policy responds to. Exclusions sit in the base form and in endorsements, and at claim time they decide the outcome more often than the coverage grant does.