Prevent a Product Liability Claim Against Your Business

Businesses that manufacture or supply products to members of the public have a duty of care and a responsibility to ensure the safety of the people who are using them. The Federal Trade Commission (FTC) protects the general public from any faults, damage, or injury that might arise from using a product. Various further regulations might be relevant to your particular business industry. Every year, product liability claims fall into millions of dollars of damages, with a high number of product-related injuries and even deaths occurring. Such a claim could seriously harm your small business, so what can you do to prevent them?

Product Testing:

Continued product testing is the best way to ensure that you are alerted to any possible defects in the manufacture or design of a product. Not carrying out effective product testing could see you sued for manufacturer’s negligence or may put you in a position where you fail to recall a product that is dangerous or faulty. You must always able to prove that you have taken the necessary and reasonable steps to ensure that product defects are avoided.

Get Product Liability Insurance:

Although product liability insurance is not a mandatory requirement for your business, any company that manufactures or distributes products is wise to be covered. Product liability insurance will cover the compensation that would be awarded to the individual who is affected by a faulty product or design, along with your legal fees. You should spend some time to research and find the right level of coverage according to your needs. It can be helpful to see the advice of a lawyer to help you get the right insurance and legal strategies in place. Law firms like Brown and Crouppen St Charles MO can help.

Review Your Suppliers:

If you run a business that makes changes to a product, it’s important to put specific measures in place to review the processes and procedures that manufacturers follow. You must be familiar with and comfortable with the products or components used by your supplier. It’s also advisable to put legal contracts in place to confirm in writing that the supplier will ultimately take financial responsibility for any defects present before supply.

Warning Labels:

Finally, it’s important to provide effective, appropriate warnings on goods that might be dangerous. Failing to provide a clear warning against the potential dangers of using a product will leave your company-wide open to a claim. Never assume that people will know that the product is dangerous to use, even if it seems like common sense. Famously, a lung cancer victim won $28bn from a cigarette company claiming that they did not provide a label to advise against the risk of smoking. Even if it’s generally seen as common knowledge that the product you sell has the potential to be dangerous, clear warnings and safety instructions should always be provided.

Product liability claims can be one of the biggest costs for a business that manufactures or sells products. Keep these strategies in mind to reduce your risk.