What is product liability?

Product Liability

Product liability refers to situations where a customer purchases a product, and an issue with the product causes a bodily injury or property damage to a 3rd party. Business owners can be found responsible for the damages if the source of the issue can be traced back to the small business. Some of the common issues customers encounter that result in product liability claims include:

  • Products that cause bodily injury to the customer
  • Products that cause property damage
  • Sickness caused by food or beverages

There are many different things that can cause a product issue, but 3 of the common reasons are:

  1. Design defect: This issue will be present in a product before it’s even made. It suggests that the design of the product is unsafe or faulty.
  2. Manufacturing defect: This issue suggests that something went wrong while the product was being made. Perhaps it was assembled wrong, or missing an important piece.
  3. Marketing defect: This type of issue has nothing to do with the product itself, but rather how it was marketed to the customer. Incorrect labelling, incorrect safety warnings (or lack thereof) or insufficient instructions are common marketing defects.

The right product liability policy will help protect your business from legal costs if you’re found responsible for a product causing bodily injury or property damage to a 3rd party.

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