If you bought your child a toy and the toy broke and injured them due to faulty manufacturing, you would probably want to sue the toy's manufacturer. The same is true of your customers. If something that you make is defective and leads to an injury, they will probably want you to compensate them for the damages. This is called a product liability lawsuit, and as a business owner, it could be very detrimental to your bottom line and reputation. Here are five ways to protect yourself from such lawsuits.
1. Hire a great quality control team
Quality control is sometimes seen as a costly, unnecessary step in the manufacturing process. However, even if your QC team only catches one poor-quality or incorrectly made item a year, they are still preventing those defective items from being sold and potentially causing injuries. A good QC team will also recognize any trends in products so you can catch and reverse the trend before it causes harm. For example, they may notice that the bolts on a certain product are slowly getting closer and closer together. Upon investigation, you may find this is because a machine has been improperly adjusted. Fixing the machine will keep the problem from getting worse and leading to injuries.
Take your QC department seriously, and spend time carefully interviewing and selecting employees for those positions. They are your first line of defense against defective products and the resulting liability claims.
2. Read customer reviews
Set aside a little time every week to read customer reviews on your product. Specifically look at the negative reviews, and see if you spot any patterns of things going wrong. For instance, if five customers complain that they had to tighten bolt x when they received the product, this might indicate you need to address the issue with bolt x before it becomes a danger to someone. You could even assign one of your QC employees to reading the reviews. Make sure they know to report back to you if they see a pattern of similar complaints.
3. Pay for product liability insurance
Talk to your insurance provider, and make sure you include product liability insurance in your policy. It's not always cheap, but it is a lot cheaper than being sued for damages caused by your product. If you are sued, the policy should cover most or all of the costs so you do not have to pay out of pocket. If you make a more hazardous product, like a welding machine or a vehicle, you may want more coverage since more damage could potentially be caused.
4. Have an attorney on retainer
Hopefully you already have a business attorney on retainer so you can come to them with questions and concerns as needed. Make sure this attorney is someone who has experience with product liability. Do not wait until a claim is filed against you to talk to your attorney, either. Ask them to review your procedures and to tell you if there is anything you can do, right now, to reduce the chances of a liability claim being made against you.
5. Keep up on industry news
Make sure you subscribe to publications related to your industry. You may learn something new about making your product safer or learn from others' mistakes so you do not have to make your own. Even reading articles about your industry online from time to time can help keep you up to date on the latest safety measures.
Follow the tips above to reduce your chances of a product liability claim against your business. For more help, reach out to a product liability attorney in your area.