Product liability insurance protects manufacturers, importers, retailers, and anyone who comes into contact with a defective product from financial liabilities. Everyone from the manufacturer to the store that sells an individual a defective product can be held responsible for putting that product in a person's hands, especially if they are injured by it.
Product liability occurs when a product has a manufacturing defect that causes the injury or death of another person. Product liability lawsuits have been filed against drug manufacturers, manufacturers of baby products, as well as a variety of other products. In addition to the manufacturers being sued, the distributors and the retailers have been sued as well.
But why is everyone held responsible in a product liability lawsuit? It's because no one along the line realized that there was something wrong with the product. Each entity that is responsible for relaying the product to the customer has an obligation to notice any defects and to notify the right authorities of those defects. If the retailer is the first to notice, then it is their responsibility to pull the product off of the shelves and then notify the manufacturer of the problem.
Unfortunately, retailers are usually too late by the time the product is pulled off of the shelves. Someone is usually already hurt, they have filed a lawsuit, and the manufacturer has been notified. Then again, there are times in which the manufacturer may catch the issue and they do a voluntary recall, which usually avoids product liability lawsuits.
One of the most common reasons behind product liability lawsuits is due to physical injury or even death, which is similar to suits for employers liability. However, to be considered a product liability issue, the individual must use the product as it was intended. If its intended use is what causes the injury, then they may have a case.
If a person is injured by using a product outside of its intended use, then they don't have grounds for a lawsuit. If they use it improperly, then there is no wonder that there was an injury. They must prove that they used the product correctly in order to file the lawsuit. But if they did and they were legitimately injured, then they can sue for a number of damages.
The damages that they can sue for include medical expenses for medical treatment that they received, lost wages, punitive damages, and any other damages that are relevant to the injury that they received. This means the cost can become quite expensive for the business being sued. This is why you need to have general liability insurance that covers product liability.
It is also possible for a defective product to cause significant property damage. When that occurs, a person can sue for damages. They usually sue for the value of the item that was damaged so that they can replace it. If that damage was to an item vital to their job and they lost an income, they may be able to sue for that as well. Their lawyer can find different areas in which they can sue in order to increase their compensation.
An example of property damage is a car part that breaks and causes significant damage to the engine. The consumer, if they prove the part is what caused the problem, has the right to request the company to take care of the problem. Usually, this can be settled before it would ever reach court, but there are times that it does go that far. Product liability insurance will pay for the damages and any court costs if they are applicable.