5 Steps for Product Liability Risk Management
By Travelers Risk Control
Ensuring that your product is safe from risks may seem like a daunting task. Begin to protect your company by incorporating the five steps of product liability protection. Your control of product liability may vary depending on the stage in your product’s life cycle. During development and production, you have a significant opportunity to build safeguards against potential liability claims.
Consider the next five steps as the beginning of a comprehensive product liability protection program.
1. Transfer Risk through Management of Suppliers
A risk transfer program helps your business avoid financial vulnerability to damages and claims due to liabilities caused or contributed to by others. Without effective risk transfer, decisions of liability are often made after the fact, in court. It is much better to have such decisions documented in writing and at the beginning of a business relationship. Legal agreements can be designed to assist you in transferring risk. Work with a qualified attorney familiar with product liability law to draft these agreements at the beginning of a business relationship.
- Hold harmless agreements help ensure that your contractors and suppliers are contractually responsible for their own negligence and/or errors and omissions in the case of a claim.
- Statements of financial responsibility, e.g., certificates of insurance, can help your company avoid bearing financial responsibility for product-related claims by confirming that a contractor or supplier has the appropriate insurance in the case of a claim. Read More
