Businesses that sell tangible products to their customers are responsible for ensuring that these goods are safe to use and consume. Your company could pay a hefty price if a customer is hurt or injured due to a defective product—or one proven unsafe and unfit upon manufacturing.
It’s important to know your risks when it comes to product liability. Here’s what a customer can claim against your business if they find themselves in harm’s way while using your product and what you can do to avoid the situation altogether.
Faulty Products Can Harm Customers
Your company is liable for a customer’s injury if it’s proven that your product is defective and directly caused the injury.
Product liability comes in many forms. Customers can make claims about defects in your product’s design. Before the product is even manufactured, flaws in the design can lead to harmful consequences.
People may claim that a manufacturing defect ended up harming them. This means that something went wrong in your production line, causing a defect in how the product was made or assembled, leading to injury.
Customers can also make a claim against a marketing defect. Even if your product isn’t faulty or damaged, if you don’t include proper warning signs and instructions on your packaging, it can lead to improper use of the product. This can ultimately result in injuries.
Your company can be sued if a customer can prove any of these defects.
If a Defective Product Harms a Customer, You Pay the Price
When you are proven liable for a customer’s injuries or losses because of a defective product, the plaintiff can claim compensatory damages from your company. These damages include medical expenses for the injury, loss of wages, and cost of disability in severe injuries.
A customer might also be able to swing general damages as well or damages that you can’t put a monetary price on. These include emotional distress, loss of quality of life, the mental anguish of the injured’s loved ones, and more.
If your product is found to be liable for a customer’s injuries, your company can face huge losses. So, assessing your product liability risk and taking precautionary measures to lower it is pertinent.
How to Lower Your Product Liability Risk
Test your product design thoroughly
Ensuring your products are constantly tested is one of the best ways to protect yourself from product liability claims. If you do regular quality control checks during manufacturing, you can be confident that your products are in tip-top shape and safe to use.
Regular testing can weed out the defective units in your product line. It’s your best bet to lessen your business’ risk of product liability.
Have clear instructions and warnings on your packaging
Always think about how a customer will use your product for the first time. To avoid confusion and misuse of your product, make sure you write out clear instructions on how to assemble, ingest, and use your goods on the product packaging.
Ensure your packaging has all the necessary warning signs, especially for toys. These might include choking hazards for products with tiny components or a pharmaceutical dosage guide. Try to include storage instructions as well.
Write up a risk transfer agreement with suppliers
If you work with third-party suppliers to manufacture your products, you might want to consider drawing up a risk transfer agreement with them. That way, they are held accountable for any complaints about your product that lead to injury. This protects your company from being financially responsible for injuries caused directly by the supplier’s negligence.
To draw up a risk transfer contract, seek legal counsel from a seasoned product liability lawyer. It’s best to sign into this agreement with a supplier at the beginning of the relationship, but you can also do it with existing partners.
Get product liability insurance
If your company manufactures its products independently, consider purchasing product liability insurance.
This insurance covers the company when a court grants compensation to an individual who claims product liability against your business. It may be an added expense for your company, but it will prove to be handy when a defective product has been found to harm a customer.
Protect Your Business from Product Liability
To avoid product liability claims, make sure you thoroughly test your products. Pull out all the stops to ensure your products are safe. To fool-proof your goods, provide clear instructions and warning signs on the package to keep injuries due to misuse at a minimum.
If you find yourself in a tough product liability case, make sure to seek legal counsel. A law firm that has a roster of reputable product liability lawyers that can defend your business and keep your losses at bay.
