- November 8, 2018
- Posted by: oneplacefinancial
- Category: Business Insurance
In 2017, Johnson & Johnson was ordered by court to pay a grand sum of $247 million. This decision came about after a number of patients claimed that the company kept the flaws of its Pinnacle artificial hips a secret, causing them serious injuries and personal harm.
Don’t think your business needs product liability insurance? Think again! Here are a few aspects liability insurance addresses.
Packaging and Warning Concerns
If you do not provide sufficient instructions or defect warnings alongside your product and it later malfunctions, the customer can sue your company. Not labeling the products adequately or not being thorough in your product warnings can result in a lawsuit, costing your business both money and reputation.
Having an insurance company look over your product liability policy can reduce any such claims as well as lower consumer risks. The insurance company can also further help the business litigate claims made against them.
Apart from responding to poor packaging and warning concerns, liability insurance also covers the costs of manufacturing flaws. If your product turns out unsafe and defective, an insurance company takes into account the production flaws and mishaps that led to that condition in the first place.
One of the biggest advantages of having this form of insurance is that it protects your business in unforeseen and unpredictable circumstances. Disgruntled customers may ask for compensation after the product was sold to them without information of the defect being provided, and causes them some sort of harm.
Your business can be sued on the basis of strict liability in cases like these, and you may be required to make huge payments and fines. However, if you have insurance for your products, then you can avoid having to make these expenses and save your company from losing a large sum of money.
Manufacturers aren’t the only ones who may be sued for defective products. While most lawsuits are filed against the manufacturing entity, product sellers may also be charged with a case against them. These include wholesalers, retailers, and distributors.
If your business sells products that caused customers harm, then you may be held responsible for the defect too and be sued for helping market the damaged or wrongly labeled product. While the accountability varies in different states, it’s always a good idea to have coverage in case the worst is to happen and prevent getting into sticky situations.
Don’t delay getting insurance for your company! One Place Financial in Bellflower provides personalized financial solutions, including business insurance and general liability insurance. Get in touch with us now!