You’re a start-up business and you are selling your new, fantastic product! However, it’s your responsibility, as a company, to ensure that the product you’re selling is safe.
Producers have the heaviest liability, but this also goes for anyone selling the item.
To ensure that you avoid the harsh consequences of product liability, you need to consider the benefits of insurance, to stop this from adversely affecting you as a start-up.
Do you need it?
By law, all products sold to customers need to be safe. To sell a product, you need to warn customers of the potential risks, provide information, monitor the safety of what you are selling, and take immediate action, if any issues arise.
You need to make an active effort to ensure the safety of your products, and part of this is getting product liability insurance.
This is particularly important for start-ups, as one bad lawsuit could sink everything you have worked so hard for.
However, if you keep yourself insured, you can keep your business safe, so if anything goes wrong, you are covered. It’s a necessity for any company that sells products.
What it covers
Generally speaking, product liability insurance will cover you for personal injury caused by the item, loss or damage caused by faultiness, and unforeseeable circumstances, caused by faultiness.
There are, of course, greater protections in place, if you didn’t manufacture the product.
However, you are still liable for any damage caused.
Claims are likely
In this day and age, being sued is largely commonplace. If you have released a faulty product, there will be serious ramifications.
You may have to pay out vast amounts of money in damages, which you may not be able to fully cover, as a start-up business.
If you’re not the manufacturer, you may have to enter into arguments over who will be representing the defendant position in court.
Legal bills will inevitably stack up from this, which is what product liability insurance is for.
Outsourcing is by-the-by
As we’ve already covered, it doesn’t matter if you outsource product creation to a manufacturer; you’re still liable.
Be sure that everything is fine on your end and do rigorous testing, even if your manufacturer claims that they already have.
Even better, get product liability insurance. As the face of the product, you can often come off worse than the manufacturer. It could completely tarnish your brand and reputation.
It only takes a moment to find out how expensive claims can be, for product liability. Lawyers often use this as a badge of honour, to see how much money they can get out of companies.
It won’t be easy, if the worst happens. Lawyers will often try to make a name off the back of you, and the settlements can be absolutely crippling. However, if you get product liability insurance, you can save yourself from going under.
Do you have product liability insurance? If not, then why not?
Produced by SK Wiring, wiring product specialists who appreciate the importance of protecting your business.