When doing business with a product at any stage of the supply chain of that product, you could be held liable for any claims that the product caused bodily harm or damage.
If you’re a supplier, manufacturer, distributor, or retailer of a product, you face the same risks as everyone else in the supply chain. We’ll describe some examples below to explain more.
As a supplier, you’re in charge of providing the necessary materials to a manufacturer so they can begin producing a product. Let’s say the materials you supply are found to be substandard and unsuitable for the job at hand. The materials could cause a ripple effect resulting in the consumer buying a faulty product that might break or cause injury upon use. You could be named in the lawsuit filed by the customer who injures themselves using the product.
Say you create a product that isn’t properly assembled before being sold. When that product reaches your customers and they begin to get injured from using the item, they’ll not only name the store who sold it in the lawsuit they file but you’ll be named as well since you are the manufacturer. Product liability insurance could help protect you.
As a distributor, you’re responsible for circulating the product to everyone who can sell it. This means that—in a lawsuit concerning product liability—you could be named and held liable for injuries that occur to the end user of the product who was harmed.
When you sell something directly to a consumer and it ends up causing them harm or injury, you can be held liable for selling an item that causes an individual harm. This means that in a liability lawsuit you’d be sued and likely have to pay for associated costs.
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