How to Protect Your Site from Product Liability Claims
If the products you sell injure your customers, provide them discomfort or psychological harm, or even fail to live up to the expectations you set, your customers could take legal action against you. High-profile examples of this include faulty airbags, which have a chance of exploding on impact, but you could also be held accountable for false advertising, or for any defects present in your product before you sold it.
Liability claims can be significant, with the average product liability claim being more than $3.4 million. So how can you protect your website from this potential legal outcome?
Types of Liability Claims
First, you should be aware of the types of liability claims you might face:
- Design defects. Your product might be found to have a defect inherent in the design. For example, you might have a glass product that shatters easily, potentially causing lacerations that harm unsuspecting customers.
- Manufacturing defects. Manufacturing defects kick in, as you might expect, on the manufacturing line. There’s nothing inherently wrong with the core design, but something during the manufacturing process affected a batch of products or a single product, such as contamination with an unsafe material.
- Marketing defects. Finally, there could be a marketing defect. Keep in mind that many dangerous products, such as cigarettes, weapons, and chemicals, can be sold to the public—as long as they’re properly disclosed and described. A failure to advertise the potential dangers of a dangerous product could result in a marketing defect, and you could be held liable for the neglect.
How to Protect Yourself
Fortunately, there are some strategies you can use to protect your site from the possibility of a liability claim:
- QA test. Spend some time QA testing your product long before it ever gets in a customer’s hands. This will help you find and fix any design-level defects that could affect your product in the future, and may proactively identify weak points in manufacturing.
- Evaluate your manufacturers, distributors, and retailers. Be very choosy about who you work with. Spend some time vetting your candidates in manufacturing, distribution, and retail; check their track records for previous liability issues, and inspect their facilities and processes to ensure the lowest risk possible.
- Push liability upstream. If you can, try to push liability issues as far upstream as possible. In other words, seek language in your contract with the manufacturer that the manufacturer will accept responsibility for any manufacturing-related defects; this puts the burden of inspection and quality control on them, and will protect you if a product is found to have a manufacturing defect.
- Provide detailed descriptions onsite. Try to describe your products as accurately as possible, explaining exactly how they’re supposed to be used, and exactly what customers can expect when they purchase them.
- Offer warnings, even if you don’t need to. While you’re at it, if your product could be even remotely dangerous—such as posing a choking hazard for small children—it’s a good idea to offer a warning to consumers. These warnings, provided they’re worded and placed properly, could protect you from almost any type of product liability.
- Include limited warranties. You could also protect yourself by offering limited warranties, offering to repair or replace products within a certain timeframe. That way, if a component fails outside of that timeframe, you’ll be less likely to face liability charges.
- Get liability insurance. One of the best steps you can take is product liability insurance, which will protect your business in the event that your products are found defective. Depending on the circumstances, your general liability insurance policy may be able to offer you protection, but product liability insurance will go a step further. Costs are minimal on a monthly basis, and the policy could protect you from paying almost any type of financial damage.
Because anything could happen, product-related legal trouble isn’t entirely unavoidable. However, by taking these precautions and being aware of the dangers, you can significantly lower your risks for facing legal action. The more preventative and cautious actions you take early on, the more consequences you’ll be able to avoid later on.