Your Business’s Product Has Caused Injury. Now What?

As a manufacturer, your operation has significant product liability exposure and requires specialized insurance to protect against these risks. Protect your business with New Jersey Business Insurance that includes Product Liability coverage in the event you’re held liable for a loss to personal property, business property, injury or death as a result of your products. Responsibility lies with all sellers of the product who are in the distribution chain.

Product liability issues could result from a flaw in the warning label and instructions, manufacturing, or design. These errors could turn your operation upside down, as they affect every single unit of a product that your business produced. Let’s take a closer look at what a product liability claim could be like for your business.

Responsible Parties

An injured person doesn’t have to be the purchaser of the product in order to recover. Any person who foreseeably could have been injured by a defective product can recover for injuries, as long as the product was sold to someone.

The burden of proof in some product liability cases falls on the defendant, indicating that the defect would not exist unless someone was negligent. If the doctrine is successfully invoked, the plaintiff is no longer required to prove how the defendant was negligent; rather, the defendant is required to prove that it was not negligent.

If strict liability applies, the plaintiff doesn’t need to prove the manufacturer’s negligence, but only that the product was defective. By eliminating the issue of manufacturer fault, the concept of no-fault, or “strict” liability allows plaintiffs to recover where they otherwise wouldn’t.

Common Defenses

Should a customer claim injury or illness as a result of one of your products,  these are some of the most common defenses:

  1. Plaintiff hasn’t identified the supplier of the product that allegedly caused the injury.
  2. Plaintiff substantially altered the product after it left the manufacturer’s control
  3. Plaintiff misused the product in an unforeseeable way

Act quickly if a product physically hurts someone. Product liability insurance can help cover the cost of a product liability claim over bodily injuries, but you must:

  • Contact your insurance provider.
  • Notify the US Consumer Product Safety Commission.
  • Identify defect source.

When is a Bodily Injury Claim a Product Liability Claim?

Things get tricky when a bodily injury is caused by a consumer good, and it is particularly tricky when trying to determine insurance coverage. Depending on the nature of the injury, it may or may not fall under the product liability umbrella. For example, if someone fell off the ladder because it failed to lock and collapsed, the injury could be a product liability issue, if:

  • A mistake was made in the ladder’s design.
  • A mistake was made when the ladder was manufactured.
  • A mistake was made in the instructions or safety labels.

What To Do If a Bodily Injury Claim is Filed

The first thing you should do is contact your New Jersey Business Insurance provider, ideally doing so immediately. You may be covered for bodily injuries caused by your products, but before that can happen, the claim needs to be investigated. Call your provider so claim investigation can begin.

Manufacturers, importers, distributors, and retailers are obligated to report products that are potentially defective, inherently risky, or noncompliant. Contacting US Consumer Product Safety Commission immediately may save you hefty fines, and reduce the likelihood of a recall.

Identifying the source of the defect can help determine your business’s exposure. Even if your business isn’t the reason bodily injury, you can use the information to decide your next move.

About SB One Insurance Agency

At SB One Insurance Agency, we have served the businesses and residents of New Jersey, New York and Pennsylvania for more than 60 years. We are a wholly owned subsidiary of SB One Bank, the region’s premier banking institution, and we are prepared to offer you personal, business, employee benefit, and risk management solutions. To learn more about our coverage options, contact our specialists today at (888) 990-0526.