Reducing Products Liability: Design

DesignDistributors and retailers face unique products liability exposures. This is particularly true because your product lines are typically produced by independent manufacturers. Failure of a product you’ve distributed can draw your organization into litigation over damages that may have resulted from its design, defect or failure.

In addition, your company may distribute products produced in a foreign country. In this situation, your company can become a primary defendant within the “chain-of-commerce” (along with the retailers involved).

By being diligent in preventing employee and customer injuries, as well as property damage, you will help minimize accidents and help to reduce your insurance costs. You can help control and manage the insurance risks associated with product safety by implementing these tips:

Design

• Develop a statement of company policy on safety and provide it to all staff

• Assign design responsibilities to a Professional Engineer (PE)

• Have a PE thoroughly review and approve products before distribution begins

• Verify that manufacturers of products you distribute are maintaining adequate records of product testing

• Have the customer sign a hold harmless agreement exonerating your employees and company from liability in the event of litigation

• Pay attention to any hazards created by the product’s design and make sure appropriate hazard warnings are displayed on the product

• Arrange to have each manufacturer of products you distribute list your company as an Additional Insured on their Products Liability policy

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