Product liability insurance is a type of business insurance that protects manufacturers, wholesalers and /or retailers against the possibility of a product liability lawsuit. A product liability lawsuit may be filed by a consumer who was hurt by a defective product. Product liability damages can be significant and, without insurance, can create significant financial hardships for product liability defendants. Product liability insurance premiums vary depending on the type of product that is being insured and the expected numbers of consumers who will use the product. Start up businesses may have trouble finding an insurance company who will sell them a product liability insurance policy. Product liability insurance is sometimes known by the acronym PLI.