What Is Product Liability and How Can It Affect Your Business
If you’re in a business, you have to see to it that the products you are supplying are safe for the public to use. It is your responsibility to adhere to product liability laws in strict compliance.
Generally speaking, it is in the law that the importer and manufacturer of the given product is held liable for the products they sell. It is their responsibility to make sure the product is safe and meets industry standards.
Product Liability Claim
When a product doesn’t meet a consumer’s expectations due to unexpected defects or danger that it may have caused, a product liability claim can be made. These claims can be made under state laws, and can either be due to negligence, breach of warranty, or strict liability.
Types of Product Defects
Three types of defects may cause a particular injury and cause your business to have product liability claims.
- Design Defect
Design defects happen when there is a flaw in the product’s specific design and it can be potentially dangerous. Claims related to this may show signs of negligence on the manufacturer’s part.
- Manufacturer’s defect
This type of defect is the easiest to prove. Often the design and the standards show that the product does not conform to the manufacturer’s specific criteria. However, the hard part is determining how and why the defect happened.
- Marketing defects
Marketing defects can occur when there are insufficient instructions, improper labeling, or failing to warn the general public of the product’s possible hidden dangers. This can be due to intentional misrepresentation or gross negligence on the manufacturer’s part.
How You Can Protect Your Business
There are several ways in which you can protect your business from product liability claims.
In your contracts, pass on risk. Contractual arrangements can be made to minimize potential risk.
To minimize risk from its products, businesses should develop policies about quality assurance and product reviews. Policies should undergo product testing before implementation, and should be continuously updated.
Packaging and marketing
The packaging should have clear and detailed instructions on how the product should be used. It should also a clear warning to the consumers of the potential danger in regards to the usage of the product.
If any problem arises, it is the responsibility of the business to take immediate action, warn consumers if necessary, and take precautionary measures, such as a product recall.
Several insurance companies offer product liability coverages that can help protect a business from product liability claims that may arise.
Keeping of records
At this point, record-keeping is exceptionally vital, and maintaining copies of business records and contracts with other companies and organizations is a must. That way, you have all the information you might need if the time comes that you have to defend a claim.
A product liability claim is relatively complicated, and you will need to discuss your case with an experienced product liability lawyer to help you out with the legal proceedings.