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Protecting Your Business from Product Liability and Lawsuits

Posted April 12, 2020 by EasyFinance.com to Finance 1 0

Product liability laws are in place so that customers have protection against products that might be defective or could cause them harm. According to these laws, the manufacturer is responsible for ensuring that their products and the components are safe for the public to use. As a business owner, you are at risk when it comes to making sure you comply with the laws, and having product liability insurance is in your best interest.

When it comes to warning customers about the potential dangers of your products, you have to do more than just place a label on the package. There have been cases where judges ruled in favor of the plaintiffs, despite products having visible warning labels. Thus, if you want to ensure that your business is safe from product liability and lawsuits, check out the tips listed below.

Buy Product Liability Insurance

Having product liability insurance is not mandatory, but this coverage can be incredibly helpful if a customer ever files a claim against your company. The policy will cover the amount of money that the individual would receive if the court should rule against your company. This can spare you a lot of money and ensure that your company doesn’t go out of business due to litigation.

Not every policy is created equal, so you’ll need to take the time to find one that will work for your wants and needs. Talking to a professional can help with this endeavor and ensure that you get the coverage that will benefit your business.

Test Your Products

Even though your products may already be on the market, this doesn’t mean you should stop testing them. The more tests you run, the more problems or defects you may discover with your product. Testing ensures that your customers are safe when they buy and use your products, but it can also give you insight into different manufacturing techniques that could help you create the best products possible, as well as save you money during the process.

Testing your products also gives you the opportunity to add the appropriate warning labels to the packaging. If you discover new issues or problems during the process, it’s in your best interest to update the labels and make sure they are visible. The more information and disclosures you can give to customers, the better it is for your business.

Scrutinize Your Suppliers

It’s possible that some of your suppliers may be making changes to your products once they receive them. While this may benefit them, it could be disastrous for you. To ensure you are shielded from any alterations your suppliers might make, it’s in your best interest to have them sign an agreement that says they will be financially responsible for any product defects that might happen because of their shipping practices.

Talk to a Professional

When it comes to finding the right product liability insurance for your company, talking to a professional insurance provider can help. They’ll help you find the package you need to get the best coverage. In addition, it’s also a good idea to talk to a lawyer who has experience with product liability laws and regulations. They’ll be able to answer questions that might arise and help you if you get sued by a customer. Working with the best insurance professionals is the best way to ensure that you are covered should anything go wrong with your product and a customer gets injured.

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