If you are a product manufacturer, you are responsible for all damages (personal or property) that may be caused by the goods you sell, manufacture or import. Regardless of whether the damage was caused to a client or to a third party, you will be liable.
For example, the craftsman who creates jewelry is liable if the jewelry contains metals that cause allergies, and the restaurant is responsible if food items lead to sickness.
A product liability insurance policy can protect you due to any negligence.
The failure is usually caused by a “latent defect” that prevents the object from running correctly. This defect may be due to a manufacturing problem or design, improper assembly, or there may be a defect in the material itself, etc.
In addition; you are also responsible for mistakes made during delivery, storage, conservation (e.g. rupture of the cold chain), and even the facility for certain goods, as well as errors in the labeling.
You will be considered liable for mistakes in the user manual too. You should request a product liability insurance quote right away before a defective product claim is made.
The product liability insurance policy compensates victims of all their injuries caused by the goods you sell. It plays both in favor of customers of the company and the third parties because it is an assurance of tort and contract. However, there are a number of exceptions.
The product liability insurance does not apply in the case of serious misconduct or course for negligence caused deliberately. In addition, the contracts “core” excludes damage caused by new products in the market. In this case, you must request an extension of warranty.
The damage caused by hidden defects can be considerable. Because of an affected product, thousands of copies may not be sold. Nevertheless, the insurance policy will compensate the victims instead of the company. To limit these benefits, most product liability insurance contracts include a “globalization” clause.
With this clause, the insurer considers that there is a single claim from the time when many claims come from the same error.
In this case, it pays a total capped compensation. The contractor receives this limited benefit and should, in turn, compensate the victims in relation to actual damages they suffered. Clearly, this clause limits the warranty of product liability insurance.
The company can be held liable for damage to products – even after the sale is made.
This risk will be covered by an extended warranty for product liability insurance or specific “after delivery” insurance. The manufacturer-seller may be liable for damage that would be caused by its products.
The buyer simply demonstrates the existence of a hidden defect of the product in question for the company that has been held liable.
This heavy liability can be assured. A warranty of the product liability insurance will be extended based on:
– The inherent vice of the product (e.g. a manufacturing defect that makes the use hazardous);
– The insufficient or erroneous recommendations (e.g. a manufacturer does not indicate any precautions) and packing mistakes.
Overall, you have to think about consumer protection and product liability insurance can be of great help to you in defense to these type of liability claims.