If your business manufactures products, it's imperative to understand the three main types of defective product liability claims. Products made or designed with defects, along with those lacking inadequate labeling, are subject to legal complaints. Here's a closer look at these product liability claims and how to protect your business.
Product defects always occur, although modern digital tracking technology has resolved many production problems. The defects can often result from rushed production schedules, malfunctioning machinery, or operator errors. If the product defect causes consumer harm, it can lead to an expensive court battle or even a series of lawsuits
A worse scenario for a manufacturer than a product defect is a design defect. That means all the produced units will be defective and probably need to be recalled. Defective product liability claims include damage or injuries caused by flawed designs.
Products with a poor design proven to cause injuries usually get yanked off the market or replaced by updated versions. It's not in a manufacturer's best interest to get press for evil designs leading to injuries and financial losses. But having the proper insurance to cover the losses allows for a smooth rebound and paying closer attention to quality control.
Not all products require specific labeling, but consumer protection laws generally point to manufacturers’ responsibility to label products clearly and accurately. Dangerous products such as power tools are supposed to include warnings to consumers about safety issues.
When an instruction manual is thrown together in a hurry, it can confuse consumers and cause them to damage their purchased item. Or if certain ingredients that pose health risks are not disclosed on a label, a consumer might get ill, then sue the manufacturer.
Think of a pharmaceutical company to get a good idea of how these three types of product liability claims differ. There have been numerous cases where pharma products have been recalled for containing an added toxic element that leads to illness. It can trigger claims based on product defects.
If people become ill due to a pharma product's normal ingredients, it can lead to design claims. Pharma companies must list the ingredients of their products in the packaging. The wording should be clear, although many ingredients are hard to pronounce or recognize by the average person.
The same principles apply to a toy maker. The toy manufacturer has a responsibility to make its toys safe for children and identify whether adult supervision is required. Unsafe toys due to rushed production for the holidays can trigger a wave of liability claims. The same thing is true for toys that are designed without safety in mind. The more dangerous a toy is, the more evident it should be in the instructions.
There are countless scenarios in which customers can complain about a manufacturer's products. If something is wrong with the product, they have a legitimate right to demand a refund or some other offering. But if the product is such a disaster it injures people, it can result in lawsuits. Contact us today at GrayStone Insurance Group to learn more about defective product liability claims.