With the rapid growth of China’s economy, people enjoy high level income and canafford a variety of domestic and foreign high-tech products. In the mature marketmechanism, the market plays a basic role in resource allocation, but the power ofmarket can’t eliminate the risk of violations to the customs caused by the defectproduct. The product quality problems must be given the priority to be solved. Howto protect the consumers from violation and irritate the manufacturer to improve theproduct quality is a goal of China’s economic and legal construction.Products liabilityinsurance provide a good choice to achieve this long-run goal, what’s more, the legalsystem is getting more and more perfect which builds a smooth legal system forthe promotion of products liability insurance. In reality, the product liability insurancejust take a low share in the insurance market and the development conditions is notvery optimistic on the contrast to the average level of the world, how to push thedevelopment of product liability insurance comprehensively is a harsh problem facedby the whole insurance industry.The author studied the current issues and the trend of development of liabilityinsurance based on many references.The full text is divided into five parts, thefirst part introduces the legal basis for product liability insurance legal system andthe imputation principle, the second chapter analysis the demand of product liabilityinsurance by the angle of economic, and use a simple game modelinvolved customers, government regulation, product liability insurance to explain therole in promoting the quality of the product. The third chapter conducts empiricalanalysis on product liability insurance and the product qualified rate to check theeffect of product liability insurance in promoting the quality of product. Thefourth chapter specifies the status of China’s product liability insurance developmentand find out the impeding factors. The last chapter puts forward somefeasible suggestions to promote the development of product liability insurance inchina by inferring the experience of American and Japan in developingproduct liability insurance.