You did not make it. You can still be the one who gets sued for it.
A distributor sits in the chain between a manufacturer and a customer, and that position carries liability of its own. When the maker is overseas, dissolved, or simply unreachable, the party the claimant can actually reach is you.
Start a quote file Read the short answer firstEveryone who sold it can be named.
Distance makes you the reachable party.
Withdrawing stock is its own cover.
Can a distributor be liable for a product it did not manufacture?
Yes. A claimant injured by a product will generally name everyone in the chain that put it in front of them, which includes the importer, the distributor and the retailer as well as the maker. Your general liability policy contains products liability for exactly this, and it responds to your role in the chain rather than to whether you designed or built anything.
Where this bites hardest is on imported goods. If the manufacturer is on another continent, has no assets here, and cannot practically be pursued, the distributor is not one of several defendants. The distributor is the defendant. That is not a legal technicality, it is simply who is within reach.
First, what happens to the goods while you have them? If you only warehouse and ship sealed cases, your role is narrow. If you repack, relabel, assemble, kit, translate instructions or put your own brand on it, you have moved closer to being treated as the maker, and some wordings say so directly. Second, what does your supply agreement say? An indemnity from your supplier is worth exactly what the supplier is worth and how easily they can be pursued. Both questions are answerable in an hour and both change what your policy needs to do.
The first two are usually there. The last two usually are not.
Products and completed operations
The section that answers injury or damage caused by goods after they have left you. Check the limit and check that it is not being confused with your general liability limit for premises accidents, because they can be shown separately.
Vendors cover
Your retailers will often ask to be added as additional insured for products they bought from you. It is a normal request and it is how a supply relationship is usually documented. Ask what it costs before you agree to it in a supply contract rather than afterwards.
Recall and withdrawal
Getting product back off shelves is a logistics and communications cost, not a damages cost, so liability cover generally does not answer it. Recall is separate and it has to be asked for. For anything consumed, worn or used by children, it is the item most worth pricing.
Goods in your care
Stock you hold that belongs to someone else, whether on consignment or under a third party logistics arrangement, is not your property. Care, custody and control exclusions apply and warehouse legal liability is the answer. This catches out businesses that have grown into holding other people’s inventory without changing their policy.
Three that came down to position in the chain.
The supplier who could not be reached
An imported item failed and caused an injury. The supply agreement contained a clear indemnity from the manufacturer. The manufacturer had no presence, no assets and no interest here. The indemnity was legally sound and commercially worthless, and the distributor’s own products cover was what actually answered.
The label that changed everything
A business bought generic product and applied its own brand before selling it on. In doing so it presented itself to the buyer as the source. Own brand goods move a distributor much closer to a manufacturer’s position, and it is worth telling your broker the moment you start doing it.
The consignment stock
A warehouse fire destroyed inventory, a meaningful share of which belonged to two clients rather than to the business. The property policy insured the business’s own stock. The clients’ goods needed warehouse legal liability, which had never been added because the arrangement grew gradually.
The ones that come up when a retailer sends their contract.
Our supplier indemnifies us. Is that enough?
It is worth having and it is not a substitute for your own cover. An indemnity is only as good as the indemnifier’s ability to pay and your ability to pursue them, which is precisely the thing that fails on imported goods. Hold both.
We only warehouse and ship. Are we really exposed?
Less than a business that repacks or rebrands, and more than nothing. You are still in the chain of supply. The narrower your role the easier that is to argue, which is a reason to document exactly what you do and do not do to the goods.
A customer wants us to add them as additional insured. Should we?
It is a common and generally reasonable request from a retailer. Read what it asks for, because some versions reach beyond products you supplied and into the retailer’s own conduct. Send us the clause and you will get a written answer before you sign.
Is recall cover expensive?
It depends heavily on what you distribute, and it is a separate conversation from liability. The useful first step is knowing whether you hold any of it at all, because most distributors assume products liability covers getting the product back and it does not.
We hold stock for other businesses now. Does that matter?
Yes, and it is the most common thing that changes without anyone updating the policy. Other people’s goods in your building are not covered by insuring your own. Tell your broker when that arrangement starts, not at renewal.
Two that follow the same stock: what general liability does not cover and what a carrier owes you for freight.
Not the question you had? Send your supply agreement and the question with it through the quote file and you will get a written answer, not a sales call.
Know where you sit in the chain before somebody else decides.
What you do to the goods, and what your supply agreement says. Two answers that set your whole exposure.