Countless lawsuits occur in the US every year as a result of a defective product, or due to the unsafe practice of a service injuring a customer. The outcomes of these lawsuits can have devastating consequences, and for small businesses especially, they can be utterly crippling. Larger businesses no doubt have their bases covered with product liability lawyers, insurance, and often having the pockets deep enough to settle out of court if need be.
However for smaller businesses, this is quite often not the case. For example, take your local farmers market. It’s a wonderful idea that local folks can grow and sell their foods, and different markets will be regulated in different fashions. But when the food being sold causes people to become sick, it is not certain that the farmer has the lawyers, the insurance, or the deep enough pockets to repay for the damage done, and the damage could be great.
Let’s say that you purchase some bad spinach from a local gent at your local farmers market, he seems like a nice guy and his spinach looks delicious. But unbeknownst to you and the farmer, the spinach has been contaminated with E. coli. You take it home and eat it, and that night you become ill. So ill you are forced to go to the hospital, for which you do not have insurance to pay. Meanwhile the next few days you must stay at home, unable to work. This scenario is not entirely unlikely, and is one of the nicer outcomes. E. coli can have seriously dangerous affects if not treated properly and promptly, in certain cases people can die.
Now you put the burden of whatever occurs back upon the farmer, and what is likely to be the result? Will the farmer have the funds to pay for compensation, the insurance, or the lawyers to protect them? Regardless, for any size business, no matter how harmless what they provide may appear to be, it is utterly crucial that protection is had in the form of insurance. It not only protects the business, but it protects the consumers as well. It’s obvious no sane person would sell anything that has the potential to hurt someone unless that harm is well known to all.
Product Liability Explained
So if product liability is so crucial for a business to consider, what is it then? Product Liability is an area of law where manufacturers, distributors, suppliers, retailers, and any others who produce a product, which is available to the public, are held responsible for any potential injuries sustained by the use or consumption of said product or service.
There are essentially three different types of liability that a business should be aware of:
Manufacturing defects occur where within the manufacturing process, poor quality materials were used, or the product itself was not constructed or put together properly.
Design defects arise when the actual design of a product is considered dangerous. If the product is not what consumers expect, or is otherwise inherently dangerous beyond expectation, it will be deemed a design defect.
Failure To Warn consumers of the potential dangers of a product also constitute product liability. This refers to any non-obvious dangers that are not apparent to consumers and may have been mitigated through proper warning.
Breach of Warranty
Warranties are statements put forth from the producer describing a product to the consumer during a transaction. There are three types of breach of warranty to be concerned with.
Express Warranty is concerned with the description from the company of how the product is intended to be used, and things that it should not be used for.
Implied Warranty of Merchantability is related to the expectations commonly found for all products, where certain things ought to be obvious to consumers.
Implied Warranty of Fitness is the same for the most part as that of Merchantability, save that by using certain products, its expected that the consumer is physically able and capable of using said product without sustaining injury.
Negligence
Negligence claims require proof that the manufacturer was indeed negligent in some regard. Either a duty was owed and certain things expected, there was a breach of said duty, the breach is what caused injury, and that injury was quantifiable in some manner. To be quantifiable, either physical injury, emotional distress, or some other measurable negative outcome must have occurred.
How Consumers Are Protected
Due to past years, and countless people being injured due to the use of a product or service, there have been laws created to protect consumers. These laws are dependent upon the states themselves and the statutes they have created. The most well known of all consumer protection laws are referred to as lemon laws. These are laws that became widely used for automobiles, as they are generally the second largest investment, next to homes, for Americans. The safety standards for vehicles had to be set to ensure people were not being sold “lemons”.
Hopefully by now, you will understand the importance for a business to have product liability insurance, and what constitutes product liability itself. It something that is dealt with on a daily basis in the U.S, and businesses should protect themselves to avoid potential problems in the future.