Adverse Reactions Can & Do Happen: How Beauty And Cosmetics Insurance Can Help In A Lawsuit
Did you know the global haircare market value is approximately worth $85.5 billion dollars and is expected to grow to 102 billion dollars by 2024? With the beauty industry on a continuous rise, the risk of customers experiencing adverse reactions to a product sold expands with the number of potential interactions.
In one recent example, customers who purchased WEN by Chaz Dean cleansing conditioner experienced negative reactions and took the company to court. WEN’s adverse reaction lawsuit should serve as an example that a lawsuit can happen to any business. As a business owner in the industry, beauty and cosmetics insurance can protect you from the financial turmoil of third-party claims, such as slip and falls, lawsuits, and adverse reactions.
Here’s What Happened With WEN Hair Care
Customers experienced bald spots, hair breakage, irritation, and scalp rashes from the company’s cleansing conditioner. The Food and Drug Administration received over 100 complaints of adverse reactions and an investigation was launched. It turned out that WEN had over 21,000 complaints from customers on file. According to some customers, “they started seeing hair loss after one week of use; one user claimed to suffer sores on her scalp which eventually lead to her hair falling out. And another reported that even after she stopped using the products her “hair [is] still not quite right.”
The company later settled a class-action lawsuit for $26 million for the adverse reactions customers experienced after using the hair care product. In spite of the negative allegations, WEN is still afloat and experiencing well-earned success by targeting customers through infomercials and celebrity endorsements.
WEN's ability to stay in business after such an expensive class-action lawsuit is a testament to the financial viability of their company, however, could your company face a similar lawsuit and stay in business after? Some businesses might be able to, but others might have to close for good. A lawsuit can detrimental if you’re not financially prepared, unless you have insurance.
Beauty and Cosmetics Insurance Is Cheaper Than A Lawsuit
If a customer decides to pursue a lawsuit, the defense costs alone could break the bank. Even if you are not found liable, you still need to pay the lawyers who defend you.
Here's are some litigation costs you might pay out of pocket.
- Court filing, processing fees, and evidence
- Any late fees
- Hiring experts in the industry
- Travel expenses for yourself and the legal team
You may never see a day in court, but are you prepared if a lawsuit comes your way? Protect your livelihood and don’t leave it up to chance. With the beauty and cosmetics insurance, you can alleviate the cost and save your business from financial turmoil.
What did you think about WEN’s lawsuit? What would you do in their situation? Let us know in the comments below.
All policies have conditions, limitations and exclusions, please read the policy for exact verbiage. Claim scenario circumstances vary in nature and similar claims do not guarantee coverage.