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Small business owners must address product liability

A business is only as good as its product. Entrepreneurs can spend years researching, dreaming, testing and designing their product. Ultimately, though, no product is perfect. Most products pose some sort of risk to consumers. As a result, small business owners face serious liability issues due to their products.

It behooves small business owners to take steps to reduce their product liability. This is important not only to protect their own financial standing, but to protect consumers from potentially-harmful products.

Understanding liability claims

Product liability claims can encompass many issues, all of which fall into three categories:

  1. Manufacturing flaws, which result from the production process.
  2. Design defects, which are caused by some flaw in the product’s design.
  3. Defective instructions that do not adequately warn or educate consumers about the product.

Product liability insurance

Many entrepreneurs and manufacturers purchase product liability insurance as a means of covering the potential damages from a lawsuit. Generally, product liability is covered under a general liability policy. Obtaining this insurance can be difficult if the product in question is particularly hazardous. The lower the risk of injury to consumers, the easier it is to obtain product liability insurance.

Small business owners and product liability

Product liability should be one of small business owners’ foremost concerns. Even a product that has been carefully researched and tested can be subject to a lawsuit. A product need not even be particularly dangerous: Consumers may sue over any small, perceived damage. These lawsuits can be costly, time-consuming and reputation-damaging.

It is up to small business owners to address their liability risks. This complex legal issue is often resolved through working with a business attorney who understands small businesses and product liability. And if a product does for some reason inflict damage on a consumer, small business owners will need the legal tools to handle that situation.

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