So you bought your business with a product liability insurance policy; it’s a step in the right direction, but you still need to protect your business from product liability issues because trust me product liability cases are not always clean.
Sometimes they can be so complicated that you have to spend a lot of time cleaning up and repurchasing your business image long after the deal is settled. Product liability can eat up significant business profits and even lead to business failure. Hence, it is better to avoid them completely.
Here are some of the proactive steps you can take to reduce product liability, which I have broken down into three sections; one for the manufacturer, the other for the distributor / seller, and the last is general advice for both categories of business.
1) Conduct an honest risk assessment of your products to find out how they might put users at risk, then take proactive steps to mitigate or eliminate those risks.
2. Hire a design specialist -: It is always better to hire experienced staff to help you design your products in a way that is safe for users.
3. Once the products have been designed, it is now up to you as the manufacturer to ensure that all products are manufactured according to design without any defects. … You need to make products that are safe enough for your users.
4. Keep track of your competitor’s products to learn how to improve your own products. You should also be very familiar with the trends and developments in your industry.
5. Source for your materials and components from reliable and reliable sources Sometimes the damage is not from your own manufacturing process, but from using faulty parts in the making of your products, and to get around this problem you really need to avoid using the cheapest material on the market, you need to choose the best quality material.
6. Meet all design standards … Most industries have minimum design requirements, and to protect yourself you must meet those standards.
7. Make sure the manufacturing process is closely monitored and staff are well trained in best practices … Standard quality controls should also be established so that products can be carefully inspected and inspected before being sold. Whenever a fault is detected, make sure it never leaves your production facility until it is corrected.
8. Additionally, you should constantly look for ways to improve your products and document the efforts you are making to improve … It can protect you in the event of a product liability claim.
9. Finally, you should ensure that your product comes with a user manual that contains proper instructions on how to use and not use the products, as well as consumer safety warnings. You may need to hire a safety professional to help you draft a safety warning document that will be included in your manual as many manufacturers have been found guilty of product liability lawsuits because of the warnings they contain. ‘they issued their products proved inadequate. The security professional will be able to determine the appropriate number of warnings.
If you do all of this as a manufacturer, you can significantly reduce your company’s product liability requirements.
How to Reduce Product Liability Requirements in 3 Steps – for Distributors
As a distributor, you are the liaison between the manufacturer and the seller, and sometimes you are the first in the line of contact when a customer wishes to make a product liability claim. Some manufacturers are even looking for ways to shift the blame and burden of the claim onto the distributor so that you are properly prepared to deal with such cases if and when they arise. You can protect yourself by following these steps.
a. Always supply your items from reliable manufacturers who have a solid track record … Don’t try to cut costs by shooting yourself in the foot; This is what happens when you hang out with bad manufacturers because their products are cheaper.
b. In addition, you should refrain from modifying any products or activities that may affect the product. Keep your storage space tidy and make sure that the method of preservation used will not damage the food.
vs. You must also perform a thorough inspection and testing of all goods received from manufacturers. before they are sold in the market.
4 useful tips to reduce your company’s product liability requirements
I. Obtain product liability insurance for your business, whether you are a manufacturer, distributor or seller. This will help cover all costs associated with product insurance claims and will also prevent damage to your businesses and bankruptcy. If you have to take legal action, the insurance company will cover the costs, and if you are ultimately asked to pay compensation, the insurance company will pay the bills.
ii. Observe the terms of the insurance contract and follow all necessary procedures to avoid losing insurance claims because insurance companies will always be looking for loopholes and ways to avoid paying insurance claims, especially when it comes to a huge amount of money.
III. Refrain from serving any advertisements that could mislead consumers of your products. You need to make sure that the consumer is fully aware of the use of the products. Do not make false claims or promises because there are people looking for such loopholes to feed on the hope of making money from liability settlements.
iv. You should also have a standard product recall plan. … Product recalls can be very expensive and time-consuming, but if you have a solid plan, you can significantly reduce the cost of item recalls. You should also consider purchasing an insurance policy to cover the cost of recalling goods and any damage that may result from the recall of your goods.