Need Insurance? Product Liability Claim

by : Atty. Gabriel Cosh

Product liability claims are common lawsuits against manufacturers and distributors of products for damage caused to consumers by defective or substandard quality of their products.

Product liability claims cannot be avoided especially if your product is a hit in the market. Increased volumes of products means increased risk of product liability suit. It is, however, a small price to pay in exchange for success.

For all you manufacturers and distributors, it is a must to get liability insurance. Product liability insurance protects you from impending lawsuits. Remember, it really pays to have product liability insurance unless you want to be listed as one of the statistics. The statistics that I am talking about is the statistics where consumers sued the manufacturers and distributors and won. They did not only win but they win big. The jury grants huge sums of awards for damages caused to a consumer. Why is this? It is because you the manufacturers make a lot of money, or so they think. This plus the fact that it’s a David vs. Goliath claim. A poor solitary consumer falls victim to one of the products of the huge money making entities. If this is not scary enough, some consumers are granted relief even if they blatant misused the product resulting in their damage.

Product liability claims are usually claimed on the ground that damage was caused or that injury was inflicted as a result of the use, misuse, handling or operation and even consumption of the product. If you think that your product is perfect or that your labeling or instructions contained in your products are impeccable, think again. Claims may arise from defects in the design, manufacturing, labeling, warnings, warranties and packaging. After the product leaves your facility, other factors may cause your product to be open for liability claims. After it leaves your factory, claims may arise from storage, transportation, handling or distribution of your products.

Product liability insurance will indemnify you against all sums which are claimed against you for bodily injury, illness, accidental loss or even damage to property arising out of the use, misuse, consumption, handling or operation of your products or goods.

If you think you can save more by not securing insurance, think about this… in some states, even deliberate misuse of your product does not exonerate you from liability as against a determined claimant.