4 Ways to Secure Your Business Against Product Liability Claims

Businesses that supply products to customers, including manufacturers, suppliers, and retailers, are exposed to product liability lawsuits. In 2019, for instance, American consumers filed more than 56,000 such cases, resulting in millions in insured losses. It's worth noting that in the personal injury space, only medical malpractice cases generate higher median awards than personal liability lawsuits. With that in mind.

Here are four ways to protect your business from product liability claims.

1. Label Harmful Products Accordingly

To protect your business from liability claims related to dangerous products, ensure you indicate clear labels and warnings on the products. Although this may not prevent an accident, it will inform the user of the potential dangers involved in using the products. This way, the user will likely take extra precautions when using the products. Some products are inherently dangerous, and the only way to prevent or minimize injuries is by putting warning labels and signs on them. Such products include trampolines, some garden tools, skateboards, power tools, and some home appliances. Apart from labels, ensure the user manual contains clear warnings of the possible risks as well as ways to prevent them.

2. Test Products Thoroughly and Document the Process

Every year, consumers sustain injuries from the use of defective products, with older adults and young children being the most susceptible. Therefore, product testing is an essential stage of the manufacturing process due to several reasons. Firstly, it enables the manufacturer to identify and correct any faults and defects that may endanger the user, hence preventing possible product liability claims. Secondly, it prevents the possibility of product recalls that may attract legal fines and penalties. Lastly, it helps maintain a good business relationship with consumers, which also builds a positive brand reputation. During every testing stage, make sure to document the process as this will make it easier for you to provide proof of product safety to the court in case someone sues you for a product-related injury.

3. Discuss Liability Issues with Suppliers

To become more competitive, some suppliers modify products before distributing them. While this may be acceptable depending on the supplier's agreement with the manufacturer, it can alter the product's safety and transfer liability to the final retailer, in this case, your business. Keeping this in mind, make sure the supplier agrees to meet the financial obligations that may result in the event of product liability claims caused by their actions. However, a safer option would be to source products directly from the manufacturer or only purchase unmodified goods from suppliers.

4. Buy the Right Product Liability Insurance

Another way to protect your business is to carry the right business insurance in King County, WA. Remember, your product does not necessarily have to be dangerous or defective for a customer to sue you for injuries sustained. Moreover, if the product has a design flaw, you may be liable for the defective design, even if you had nothing to do with the design. Therefore, when buying business insurance in King County, ensure you buy product liability insurance coverage. This policy covers the costs emanating from a product liability lawsuit, including legal fees and settlement.

Use these four tips to protect your businesses from potentially expensive product liability claims. For a product liability insurance policy that covers your business at the right price, contact the team at Humble & Davenport Insurance Brokers, Inc. today.