Whatever your industry, designing a new product or finding a way to manufacture one more cheaply than others can lead to massive business success. However, years of successful operations could come grinding to a halt with a defective product claim.
Issues with the products your company produces could lead to massive financial liability for the company if your products cause property damage or injuries. How can you potentially protect your business from product liability?
Carry appropriate insurance
There are numerous different kinds of business liability insurance. You can purchase an umbrella policy, but you can also have specific coverage for unique business concerns. Product liability coverage is important for any company that sells items to the public or to other businesses.
You need to look at not just how much the insurance policy will pay out for a single claim but also the aggregate coverage or how much it will pay out in total. If a product fails for one customer, it can fail for dozens, leading to multiple claims or a mass tort. You need enough coverage to offset those risks.
Prioritize through careful testing and quality control
Testing the materials that you use for manufacturing and the individual product after production is the only way to ensure consistent quality. Ongoing testing of the product itself and individual units after production are crucial for catching possible defects before you dispatch products to the public.
Testing and quality control can also reduce your risk of issues caused by poor quality materials or component parts, as well as defective items turned out because of a new employee.
Thinking about your product liability and how it could lead to business litigation later and help you protect your business now from that future threat.