How Businesses Can Recover from Mass Product Liability Claims
Product liability impacts small and large business owners alike. Thousands of injuries occur annually because of defective products in the United States. Manufacturers and sellers can both be held responsible for a product defect.
The entire distribution chain is often part of a product liability claim.
“Thousands of people are killed as the direct result of using products such as defective children’s toys, toxic prescription medications and faulty automotive parts,” states George Bochanis.
A few of the entities that are potentially liable for a mass product liability claim are:
- Component and part manufacturers
Businesses can recover from product liability claims in several ways.
Recalls are a Start
Defective products should be recalled. Removing products from store shelves will help limit consumer exposure and will have the potential to lower the number of claims. Recalls for automotive products or large products may include fixing the problem
Takata airbags, for example, have been recalled by Honda and replaced to correct the issue.
Recalling and correcting the issue can help businesses show their commitment to customers.
Build Safety Into Design
Direct manufacturers of products should build safety into the design of the product if it will be kept available to the public. Promote and market the new safety features of a product that may have been unsafe in the past.
This will involve a business:
- Conducting a safety review
- Considering how the product is normally used
- Implementing safety so that the potential hazards are minimized
Smartphones, for example, will shut off when they get too hot to avoid the risk of the device potentially catching on fire. Businesses that have suffered through mass product liability claims can implement safety features into their design and promote these features to customers in the future.
Regular reviews of products and the assurance that products comply with current standards is essential.
Update Warnings and Review Suppliers
Products have an inherent risk of danger, and these dangers may not be known to a customer. Toys, for example, may have small parts which should come with a warning of being a potential choking hazard.
It’s important that all products have warnings on dangerous goods.
Disclosures on packaging can save a business money and put the risk of using the product on the consumer. Cigarette companies lost billions when victims claimed that they weren’t advised of the potential risk of smoking.
That’s why all cigarette packages now contain warning labels.
One woman was awarded $23.6 billion in damage against a tobacco company. It’s worth reviewing and updating warnings to avoid these risks.
Suppliers will also need to be held accountable after product liability claims. Suppliers that were at-fault should be reviewed and potentially dropped to avoid future issues. Businesses should:
- Implement procedural means of reviewing parts and products from suppliers
- Review supplier processes
Legal contracts should also be put in place that shift the financial responsibility to the supplier of the product for any defects that are a result of the supplier. This, along with product liability, can help businesses overcome mass lawsuits in the future.