Is Your Business Liable If Your Product Injures a Consumer?

Injuries are not only sustained in common accidents such as car crashes and slip and fall mishaps inside someone else’s property. Injuries and other damages may also be incurred when using a defective product. When this happen, injured individuals may file product liability claims to potential liable parties. As it is, product liability refers to the responsibility of a certain entity in-charge of the production of certain goods for any harm a defective product caused. A claim usually arises when a product, which should always meet the consumer’s expectations, has an unforeseen defect or danger.

According to small business insurance experts, the entities that are part of the chain of distribution of the defective product, from the manufacturer, retailer, supplier, to the wholesaler or distributor, may be held liable for the injuries and other damages incurred by an injured victim. However, determining who the responsible parties in the claim are can be complex, which is why it is imperative for the victim to hire a lawyer.

Product liability claims involve a wide range of products, from motor vehicles such as cars, medical devices, pharmaceutical drugs, products for infants and children, and handheld equipment, to name a few. However, claims of injury and damages caused by defective products can be categorized into three types. These are the following:

·         Manufacturing defect claim. This stems from a mistake made during the manufacturing phase of the product. The product failed certain standards of safety, but was included in the distribution anyway along with the other similar ones that were not defective, thus increasing the likelihood of an injury to the consumer.

·         Design defect claim. This stems from a product that is unreasonably dangerous despite the fact that it was manufactured according to the right specifications. There are instances in which the design of a certain product may have subtle flaws that may increase the consumer’s likelihood of getting injured.

·         Failure- to-warn claim. This stems from a product that lacked warnings or instructions for its proper usage. Such a claim usually involves a product which is not known to be obviously dangerous to the consumer, or requires the consumer to exercise due diligence when using it.

Consulting a legal professional is imperative in helping determine what type of product liability claim the victim has. The legal counsel can also help pursue the interest of the injured individual, preserving valuable pieces of evidence to further establish proof of negligence on the any of those involved in the chain of distribution of the defective product. Basically, the claim must show that the product was defective, was using it as it was intended, and the defect resulted in the person’s injuries and incurred losses.

If your business does not have small business insurance, you may want to strongly consider getting one because once a consumer files a claim against you; it would become an easy income pitfall. Product liability claims are typically expensive, which is why you would want your business and investments be protected by insurance. There are many stories of businesses that failed due to inability to provide for legal fees and compensations for the consumers, which led them to bankruptcy. This is why it is extremely important to have insurance by your side to ensure that your business will be protected. There are many insurance companies in Australia that offer topnotch and extensive insurance policies for businesses that are in the products manufacturing, distribution, and retail industry. Hence, you should not have a hard time finding one with the best policies and terms for your business. Don’t make the mistake of ignoring the fact that product liability claims may put an end to your business.