With any risk you need to have that risk protected. In the manufacturing and marketing of products this is no different. Insurance policies such as product liability insurance protects your business from claims related to the manufacture or sale of products, foods, medicines or other goods to the public. It covers the manufacturers or sellers’ legal responsibility for losses or injuries to buyers, end users or onlookers, caused by imperfection or malfunction of the product, and in some instances, a faulty design or a failure to warn against potential dangers.
There are three types of product liability insurance, namely:
- Manufacturing defects – manufacturing defects are those that arise in the manufacturing process and often involve poor or inadequate workmanship.
- Design defects – design defects occur when the product plan is intrinsically unsafe or ineffective and no matter how carefully manufactured, it will still remain defective. This may be verified either by showing that the product fails to meet ordinary consumer’s expectations with regards what constitutes a safe product, or that the risks of the product overshadow the benefits.
- Marketing defects – this can also be referred to as failure to warn. It arises in products that bear intrinsic non-obvious dangers, which could be mitigated through sufficient warnings to the users, and these dangers are there in spite of how well the product is manufactured and designed for its proposed purpose.
Product liability laws are diverse, but they differ between states, but the fact remains that a producing company should answer for its product when an individual uses the product, and it results in injury. The individual has the right to sue such companies or organizations regardless of whatever name they carry in the society.