Resources - Product Liability
Product Liability Risk Control
Attention to seven performance areas can help business owners ensure product safety and minimize product liability loss potential. They are:
- Management leadership and support. Allocate time and money. Make sure everyone understands it's good business to produce safe and reliable products. Promote "all-way" open communication among all internal and external customers. Establish accountability for achieving management product safety and liability objectives. Continually improve and update product safety plans and activities. Document improvements. Understand product liability legal concepts.
- Safe design. According to the American Law Institute, "A product...is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe...." To protect against a lawsuit based on alleged design defect, manufacturers should include the following activities in their design plan:
- Review mandatory and voluntary, codes, standards and regulations
- Anticipate reasonably foreseeable product use and misuse
- Determine the physical or mental limitations of foreseeable users, particularly children;
- Design to meet cultural/language differences for likely users
- Design to make the product easy to service, maintain and repair
- Make the product able to withstand environmental conditions in which a product may be used
- Anticipation of the product's lifecycle;
- Consider any special disposal or storage requirements
- Make sure the product safely can be safely used with other products
- Understand the impact of use with non-compatible chemicals
- Consider advances in state-of-the-art technology
- Conduct a risk assessment and design review;
- Follow the hierarchy of controls to eliminate hazards of the product
- Ensure adequate warnings, instructions and labels are included on the product and packaging.
- Legal review and counsel. Consult with qualified legal counsel before a product is brought to market. Advertisements, sales presentations or other product literature that misrepresent the product can create an express warranty that although unintended, may create liability. Consider seeking legal review and counsel when:
- preparing contracts, hold harmless agreements, warranties, guarantees and disclaimers
- acquisitions or mergers are planned
- reviewing advertising and sales literature
- evaluating product labels and warnings for compliance with codes and regulations
- reviewing records for adequacy in defending lawsuits
- planning product recall strategy
- Quality assurance and control. Focus on the manufacturing process and quality control to make sure products conform with design criteria and specifications. Tools, equipment, machinery, materials, people and the environment must all function properly throughout the production process to ensure product integrity and quality.
- Product labels, packaging and warnings. Product labels and product packaging are considered part of the product or may be viewed as products themselves. Therefore, manufacturers or those who repackage, assemble, rebuild or sell under their own label must be familiar with applicable label and packaging codes, regulations and standards.
Inadequate warnings on labels or instructions for use can lead to misuse. Remember, neither warnings nor instructions are a substitute for proper product design.
- Marketing and customer service. Any promise or representation of fact made about a product in advertising, on labels, during sales presentations or otherwise normally constitutes an express warranty. This holds true whether a “warranty” or “guarantee” is stated on the product of packaging, or it is stated by a sales clerk, service representative or persons that represent a company.
- Product recall planning and implementation. Contingency plans are needed to deal with possible defective products that may harm the user or bystander in some way.
Source: Adapted from Product Liability Risk Control - Seven Keys to Success, by Kenneth E. Ryan, Professional Safety, Feb 2003.
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