Insurance for own-brand and white-label product businesses

Your name on the box makes you the producer

The comfortable assumption is that liability for a defective product sits with whoever made it. For an own-brand business, UK law says otherwise. The Consumer Protection Act 1987 places producer liability not only on the actual manufacturer but on anyone who, by putting their name or brand on a product, holds themselves out as its producer — and on the importer who first brings goods into the UK from outside it. A business that designs a kitchen gadget, has it made in another country and sells it under its own brand ticks both boxes at once.

The consequence is blunt: if the product injures someone or damages property, the injured party can pursue you as if you had made it. You do not get to point at the factory. You carry a manufacturer’s exposure with none of a manufacturer’s control over the production line.

Why recourse against the factory is mostly theoretical

On paper, you could pay the claim and pursue the manufacturer. In practice, the manufacturer is in another jurisdiction, contracted through a trading company, possibly no longer trading under the same name, and your purchase terms — if you have formal terms at all — may be governed by their law rather than yours. Enforcement is slow, uncertain and expensive, and few own-brand businesses ever recover anything meaningful. Insurers know this, which is why they rate an own-brander as a producer rather than a shop. Your insurance programme should be built on the same assumption: the claim stops with you.

Products liability on the true basis

The centre of the programme is products liability — but arranged on an honest footing. That means the insurer knows, in writing, that you are an own-brander and importer, not merely a retailer; knows where the products are made and what quality-control arrangements exist; knows what the products are and who uses them. A products liability policy bought through an online form as an “online retailer” or “e-commerce business” is priced for a business that resells other people’s branded goods, where the claim usually travels back up the chain to a UK manufacturer or distributor. Present an own-brand risk on that basis and you have both a gap and a disclosure problem: the description of business on the schedule does not describe the business.

There is often a professional indemnity angle too. If you specify the product — you provide the design, the materials specification, the tolerances — then a defect traceable to your specification is a failure of your professional work, and some insurers treat that seam differently from a pure products claim. Where the design element is real, it should be disclosed and covered deliberately.

Recall is a separate decision

The most common misunderstanding in this sector: standard products liability does not cover recall costs. Products liability responds when a defective product causes injury or damage to third parties. The cost of finding out which batch is affected, notifying customers, shipping units back, warehousing, destroying and replacing stock, and managing the regulator — all of that falls on you, uninsured, unless product recall cover has been bought as a separate item. Recall cover is a distinct product with its own market and its own questions, and for some businesses it is worth buying and for others it is not — but that should be a decision made consciously, not a gap discovered during a recall.

Marketplaces, retailers and the contracts you have already signed

If you sell through Amazon or another marketplace, or supply bricks-and-mortar retailers, you have probably already agreed to insurance requirements: minimum limits of products liability, the marketplace or retailer named on the policy, evidence on demand. These clauses are enforced — marketplaces suspend sellers who cannot evidence compliant cover — and they are drafted for the marketplace’s benefit, not yours. A broker reads them before placing cover, so the policy actually satisfies them, rather than after a suspension notice arrives.

Two further disclosures matter more than most others. Stock and goods in transit: a container of your product on the water or in a warehouse is your money, and marine cargo and stock covers are cheap relative to the concentration of value. And sales into the United States: US bodily-injury litigation is a different world, most UK policies restrict or exclude North American exposure, and selling into the US — even passively through a marketplace — is a material fact your insurer must be told. Silence on either point is the kind of omission that surfaces at exactly the wrong moment.

What the programme looks like

For a typical own-brand business: products and public liability arranged with own-brander and importer status disclosed, at limits that satisfy the marketplace and retail contracts already signed; consideration of product recall as a separate purchase; stock and transit cover for goods from factory gate to customer; professional indemnity where you genuinely design or specify; employers' liability — a legal requirement with a £5 million statutory minimum — once anyone works for you; and a description of business that says what you actually are: a business that designs, imports and sells products under its own brand. That sentence, more than any single policy, is what determines whether the programme works.

FAQ

The factory made it, not me. Why am I liable for their defect?

Because the Consumer Protection Act 1987 attaches producer liability to own-branders who hold themselves out as the producer, and to the first importer into the UK. If your name is on the product and you brought it into the country, the law lets an injured claimant treat you as the manufacturer — and your ability to recover from an overseas factory afterwards is, in most real cases, theoretical.

Does my products liability policy cover a recall?

No — not unless you have bought product recall cover as a separate item, which most businesses have not. Products liability pays for injury or damage a defective product causes to others; the costs of getting the product back — notification, logistics, destruction, replacement, regulatory handling — are yours unless recall cover is in place.

Amazon requires insurance with specific terms. Will an online policy do?

Sometimes, but the failures are common and quiet: the limit is right but the basis is wrong, the marketplace is not named as required, or the description of business says “retailer” when the contract and the reality say own-brander. The safer route is to give the actual contractual wording to a broker and have the policy placed against it.

We sell a small amount into the US through the marketplace. Does that matter?

Yes, and it must be disclosed. North American sales are a material fact: many UK wordings exclude or restrict US and Canadian exposure, and an undisclosed US sales channel gives an insurer grounds to question the whole policy, not just a US claim. Small volumes can usually be accommodated — but only if they are declared.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.