Product Liability Calculator
Enter revenue, claim frequency, claim size and your premium.
Expected annual claim cost
β
Enter values above
Covered by insurance
β
Retained via deductible
β
Total risk cost
β
Insurance benefit
β
Premium as % of revenue
β
Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Annual revenue ($) | 5000000 |
| Liability limit per claim ($) | 1000000 |
| Expected claims per year | 2 |
| Average claim cost ($) | 150000 |
| Annual premium ($) | 8000 |
| Deductible per claim ($) | 5000 |
| Result | Value |
|---|---|
| Expected annual claim cost | $300,000 |
| Covered by insurance | $290,000 |
| Retained via deductible | $10,000 |
| Total risk cost | $18,000 |
| Insurance benefit | $282,000 |
| Premium as % of revenue | 0.16% |
Values shown are produced by this page in your browser; change any input to update them.
How to use the Product Liability Calculator
- Annual revenue ($) β default 5000000
- Liability limit per claim ($) β default 1000000
- Expected claims per year β default 2
- Average claim cost ($) β default 150000
- Annual premium ($) β default 8000
- Deductible per claim ($) β default 5000
- Press Calculate to update the results instantly.
Frequently asked questions
Enough to survive a catastrophic claim without insolvency. Most brokers suggest a limit of at least a few million, and some retailers require proof of a specific limit before stocking your product.
It is for budgeting, but not for risk. A single claim can exceed the expected value many times over, which is precisely why cover exists even when the average looks low.
Documented quality control, product testing, clear labelling and warnings, recall procedures and a low claims history. Insurers price the process as much as the product.