How Can A Product Liability Affect Your Business?

Product liability is the case when manufacturers or sellers are liable for making or selling a dangerous product to customers. The defect can be the reason for someone’s injuries and even death.

A product that did not meet the standards and expectations would bring liability problems. The customer who used the faulty product and ended up with damaged health can file a product liability lawsuit against the manufacturer or seller. Indiana’s statute of limitations for such lawsuits is two years. 

How product liability affects your products or business?

If your business faces product liability issues, things can result in a lawsuit that could cost you a lot. Product liability claims can end up with damages to consumers worth millions of dollars. Such cases happen because often, product liability cases cause severe health damages and may lead to death. 

No business owner would want to pay millions of dollars because of product liability lawsuits, which is crucial to understand how important it is to offer the right products and services. But, also it is essential to find ways to protect your business from such claims.

What types of product defects lead to product liability claims?

When it comes to product liability claims, the plaintiff must prove that the product they used caused them some form of injury. There are three types of product defects that customers can use for a liability claim. They are common for causing injuries and increase the risk of product liability with a supplier or manufacturer.

Manufacturing defects are caused during the manufacturing process of a product.

Design defects are found in products from the beginning, even before they get constructed or manufactured. There is an original design flaw that makes the product unsafe for consumers.

Marketing defects contain flaws created when the product is marketed (insufficient instructions, inadequate safety warnings on how to use the product, and improper labeling).

What causes a product liability lawsuit?

Product liability lawsuits are unique, but they have a few standard things. Your business could be found liable if the plaintiff manages to prove that the product was defective, caused them an injury, the injury caused losses, and that you as a manufacturer, seller, or designer failed to offer a safe product.

In the past, only the product’s buyer was able to file a product liability lawsuit for defects. Now several people (third parties) can file such lawsuits under most state laws. 

Let’s see this through an example. You are a pedestrian who suffered injuries after you got hit by a car that had defective breaks. You could file a lawsuit against the company that produced the breaks. If the company that produced the breaks is found liable in court, they would have to cover your damages such as lost wages, medical bills, and other injury-related damages.

What to do if you suspect a product defect?

Offering a faulty product is a risk not only for your business but for your customers as well. It will only lead to your downfall, ruined reputation, and the likelihood of never gaining your customers again. 

Besides that, being focused only on profit without thinking about the health of your customers could result in facing numerous lawsuits that would make you pay high amounts. 

Personal injury attorneys advise taking urgent actions if someone reports a product defect such as:

  • publicly declare the alleged product problem in a statement;
  • contact retailers or distributors that sell the product;
  • create a plan to correct the defect.

What can you do to reduce product liability risks?

Having suitable insurance is the first step in protecting your business from lawsuit costs. 

Include and double-check your product labels. Products that have a risk of harming the user should always have warning labels. Make sure the label is detailed and specific about any potential risk—this way, you are protecting yourself from lawsuits. If the risk is written in the label, and the customer still got injured, it is not your fault that they did not read carefully or if they decided to take their chance against the warning.

The product labels should include accurate and detailed information. For example, if a pharmaceutical company fails to point out that their medicine is risky for people with diabetes, they could face a lawsuit from a consumer with that illness after their health condition worsened once they took their product. 

Our team at Rowe & Hamilton is here to help you if your health or life was ruined because of a faulty product. Call us and schedule your consultation today.

View these other frequently asked questions pages:

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