Is product liability nessesary for your business?

Thinking of product, most companies think of all the implications that can arise from its use, focus on getting the product in the hands of the consumer and advertising to keep your brand name in the minds of the public.

They realize that they are just as vulnerable to mishaps like property damage and injury arising from the use of their products as anything else. That is why companies focus on protection by obtaining product liability insurance. 

Product liability is nessesary for your business

Understanding product liabiality:

Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make product available to the public are held responsible for the injuries those products cause. Although the word "product" has broad connotations, product liability as an area of law is traditionally limited to products in the form of tangible personal property.

Small business owners have a responsibility to third parties - customers, employees, suppliers and the community; and third party property. Being held accountable for grievances can negatively impact your reputation and finances. That's why liability cover is mandatory for small business owners under the insurance pack.

How you know if your business needs product liability:

Most companiese don’t like the word “liability” goes with their products , but product liability is major theme that, whether you make, sell, or lease a product, you should be well aware of. In your business, you will be found liable for an injury caused by a product that your business sells to the public.

There are basically two types of product liability Understanding these will not only help you in realizing why you need product liability insurance, but also help you prevent any future insurance claims.

The first type of product liability is that based on fault. If a person is injured by a product because the product was misrepresented to that person, such as omitting to disclose a defect about the product, the distributor of that product can be held liable for intentional misrepresentation or fraud. If the product is assembled incorrectly, the product failed to be tested, or failures of due care are committed by the distributor of the product, that person can be held liable through an action of negligence. 

The second type of product liability is that which is based on strict liability. Strict liability is a somewhat more advanced topic, as it applies liability without fault. It is under this type of product liability, for instance, that a product would fall if there a defect that results from inadequate instructions. Questions concerning strict liability and its implications on your product would be best left to an attorney to answer on a one on one basis. Regardless, hopefully this small introduction about product liability does help express the magnitude of product liability. Product liability is applicable to every product manufactured, sold, or leased. Therefore, product liability insurance at essential to all those who distribute products.