Product Liability: Lessons for Entrepreneurs
When starting and running a business, you have a lot to consider as a young entrepreneur. For smooth sailing, you need to be aware of and assume product liability. This is one aspect that can significantly impact your business's success.
In the United States, in the year 2021, 11.7 million people visited emergency rooms because of injuries resulting from the use of consumer products.
Consumers have legal rights when hurt or injured fatally due to a problem with a particular product. Product liability laws govern and dictate when and how victims can file a suit for compensation. Product liability lawsuits, also known as product liability claims, are civil disputes between a plaintiff and a defendant arising from using a product that causes bodily harm or property damage. Product liability claims can be brought against both the manufacturer and the retailer, so entrepreneurs must be aware of the potential risks and how to protect their businesses.
Two of the USA's most popular product liability cases were the Tylenol autism lawsuit and the Johnson & Johnson lawsuit. Parents all over America were linking Tylenol to autism and sued Tylenol's makers. These cases serve as a timely reminder of the potential risks associated with products as well as the importance of entrepreneurs being aware of the potential liabilities of their products.
Product liability lawsuits can be extremely expensive and time-consuming. In this blog, we will learn why it is critical to understand the fundamentals of product liability law to protect yourself and your business.
What Is Product Liability?
Product liability is a manufacturer, distributor, supplier, or retailer's legal obligation to compensate someone injured or suffering property damage because of a product they manufactured or sold. In the claims, the plaintiff must prove clearly that the product was defective, which means that it did not provide the expected level of safety. Another factor to remember here is that the product has to be used in the manner intended by the manufacturer. The injury should have been caused by a defect in the product.
The three types of product liability claims include defects during manufacturing, design, and marketing. Marketing defects may consist of failure to provide clear safety instructions, warning signs of potential risks, and incorrect labeling.
What Must the Plaintiff Prove?
In a product liability case, the plaintiff must show the following to successfully prove a product liability claim.
- The defendant manufactured, distributed, supplied, or sold the product.
- The product was defective in some way.
- The consumer was injured or suffered property damage because of the faulty product.
- The product was used as it was intended by the manufacturer.
The plaintiffs do not have to prove that the defendant acted negligently or intentionally. Under strict liability rules, plaintiffs can prove their case and prevail in court if they show that the defective product was the direct cause of the harm that was caused.
Difference Between Product Liability Case And Personal Injury Case
While the basic elements of a product liability case are similar to those of a personal injury case, there are some significant differences. In a personal injury case, it has to be proven that the defendant was negligent and did not keep the plaintiff safe. But in a product liability case, the plaintiff doesn't have to prove negligence. Instead, they have to only show that the product was defective and it caused the damage. This is important to remember, especially if you are a young entrepreneur embarking on a manufacturing or marketing journey.
Examples of Product Liability Cases
There have been many examples of product liability cases, and most are based on the following:
- Drug manufacturers who do not warn or caution about the dangerous side effects of the medication.
- Vehicle Manufacturers who include faulty parts in the vehicle.
- Manufacturers of Medical devices whose faulty design harms the consumer, such as replacement hip joints that shatter inside of the body.
Product liability cases can be difficult and costly to defend. As a result, entrepreneurs must take steps and exercise precautions to protect their businesses from potential product liability lawsuits. First and foremost, small business owners must ensure that their products comply with all applicable safety standards and regulations. Second, entrepreneurs should be aware of any potential risks associated with their products and ensure that all the warnings and instructions regarding proper product use are clearly stated and easily accessible. Finally, they should also consider purchasing product liability insurance to protect themselves financially in case of a product liability lawsuit.