All those business suppliers selling products to consumers, need to be extra sure if the products are safe. The chief responsibility of course falls on the manufacturer of a product, but the shops and wholesalers and other distributors too share the legal responsibilities. The suppliers of raw materials to the manufacturer too, shoulder the responsibility. The consequences can be serious for all if they feel to meet the responsibilities and once could face legal action. There could be heavy fines or even imprisonment. Therefore, it is essential to understand the basics of product liability.
Most manufacturers are covered under insurance capacity. However, recent times have seen increased product recalls and liability claims in the food industries and consumer products. Clearly, there are new laws and growing awareness among the consumers on safety and quality. Along with the fast rising awards, one also sees a growing importance of Product liability insurance, that focuses on quality control and keep the company’s defense against losses due to product liability.
Food Safety and Modernization Act became a law in 2011 and with the passage of the Consumer Product Safety Improvement Act of 2008, the product liability and recalls has risen in number and are a growing concern to all the manufacturers of consumer products and food industries. The insurance prices for product liability insurance are getting “very competitive for manufacturers across all industries, as they focus on the risk, their needs and quality control. The insurers today, want to know from where the manufacturers are getting his raw material from. Any manufacturer trying to get cheaper components offshore is naturally creating liability risks. The manufacturer is facing economic risks from recalls as well as damage to the reputation of its brand.
The FDA now allows a statutory authority to perform product recalls on food, where, earlier, they could only request a recall. The food producers as a result are now pushing liability on to the suppliers of raw materials. These suppliers are busy getting product recall insurance as well as product liability insurance. A growing number of food-related companies are buying product recall insurance, that is also known as product contamination insurance.
Product liability insurance policy goes a long way in offering the security one needs for running business. The purpose behind is to design products that offer quality assurance. As manufactures or the products, one needs to make sure that the products are safe for use as well as get product liability insurance the ensure complete safety of your products.