Product Liability
You are involved in the manufacturing business where you mostly manufacture edible products and supply them to retail outlets including supermarkets. Your product leaves your premises in good order but during shipping to the outlets, the product is tampered with, resulting in the product being damaged or contaminated. The product is bought off the shelves and used by the public and health issues start cropping up. Investigations are carried out and the problem traced back to your damaged or contaminated product. You will face huge claims with financial implications that will, without product liability insurance, see your business close down under a heavy debt.
Product Liability Insurance covers the whole product right from the product manufacture to the selling shelf;
(a) The product manufacture. How safe is your manufacturing environment? Has it been inspected by public health officials and certified safe? What quality control mechanism have you put in place to ensure that the product that reaches the consumer has undergone rigorous testing and passed quality control? Lack of these can result in claims amounting to huge amounts that can cripple your business.
(b) Advertising. Some insurance companies take up the duty to advertise the product upon agreeing to cover the product itself. In this case, they ensure that what the public is informed of the product is actually true. They do this knowing very well that they will be held liable for any misinformation relayed to the public.
(c) Shipping. How is your product shipped to the consumer? Is the shipping package up to the required standard? It is important to look into this just before engaging an insurer because if the package is poor, then the insurer's quote will definitely be high.
(d) Labels. What are the labels on the product? Do the labels contain any necessary warnings and other messages that may turn out to be important to the consumer? Any wrong, untrue or omitted messages relayed to the public may result in frivolous claims that your business may not be in a position to settle.
These are possible causes of litigation and calls for a detailed management strategy that will protect your business from product liability claims. Taking up product liability insurance will definitely protect your business from such claims. Possible measures that you can take to ensure that you minimize product liability claims include but not limited to;
- Good product design. Can its design cause any injury?
- Testing. Has the product passed quality control?
- Identification. Can your product be identified from the rest of other products in the market?
- Information. Do your customers have enough accurate information about your product?
- In case a defect has been noted after shipping, what recall options are there?
Quite a number of businesses around the world employ highly qualified personnel and use innovative technologies not only to present to the consumer high quality products but to also guard against any claims that may arise from the use of such products. With qualified personnel, cutting edge technology and product liability insurance, your business is in fact stable.