Product liability insurance coverage is essential for all businesses that deal with wholesale, retail, or manufacture of products. Product liability laws are strict, and you may be in trouble even before you realize it.
Safety concerns related to a product must be the foremost priority of the people involved in the manufacture, design, and distribution of the products. The product liability law states that the manufacturer, designer, distributor, and seller have the legal and moral duty to ensure that the product is safe for use. However, sometimes, the designers and manufacturers fail to design the product with safety in mind. Consequently, unforeseen product defects come up. In both cases, the businesses are liable if the product causes loss. Therefore, it is a wise decision to have product liability insurance coverage in place.
Know the Law
There are several product liability laws in place to regulate the product liability claims. Therefore, businesses must be aware of the various legal approaches of a product liability claim. The cases can revolve around:
Strict Product Liability:
In a strict product liability case, a complainant must prove that:
- Firstly, the product was dangerous and was sold without proper warning
- Secondly, the seller was aware that the product would reach the end-user without changes
- Lastly, the faulty product directly harmed the complainant or property.
Strict product liability cases are considered the most severe cases for manufacturers. The plaintiff does not have to prove negligence on your end to file a claim based on strict liability law. Therefore, it is enough to confirm that the product is faulty and caused harm. Chalik and Chalik states that Florida is a state that follows the strict liability statute. The need for product liability insurance coverage is more in states with strict product liability laws.
In a negligence case, a complainant must prove that:
- The accused was liable for the safety of the plaintiff
- The accused did not fulfill the duty of care towards the plaintiff
- The breach of duty was the cause of injury to the plaintiff
- The complainant suffered a personal injury
Cases based on negligence are less common because it is tough to prove intentional negligence by another party. Also, the ‘statute of limitations’ complicates this further. Casetext states that the statute of limitations for product liability claims is two years for most states. However, some states allow customers to file product liability cases even after four years of the purchase date. Therefore, you must adjust your product liability insurance coverage as per your state regulations.
In a case of breach of warranty, a complainant must prove that:
- Warranty was given at the time of purchase
- The product failed to meet the standard of warranty.
In a case of fraud, a complainant must prove that:
- The accused made promises or statements related to the product
- The statements or description of the product were false
- The defendant was aware that the descriptions were false
- The misleading descriptions were intentional on the part of the seller to influence the purchase.
- The faulty product caused harm or injured the complainant.
Overall, product liability laws are diverse and cover almost all types of claims. Therefore, you must purchase product liability insurance coverage to protect your business from unforeseen losses.