Written by Reginald Chan on January 8, 2021

What You Need to Know About Product Liability for eCommerce

There are ways of protecting the company from future concerns of product liability before they arise. Despite enormous disparities, most companies have a similar concern about product liability, brick-and-mortar operations, and virtual storefronts. On your website, a disclaimer claiming that you are not responsible for issues would not protect you from being responsible for the product you sell. But don't worry, before they happen, there are ways to safeguard your business, online and offline, from potential product liability issues.

The value of a comprehensive business insurance policy is recognized by most brick-and-mortar retailers. The store owner does not want to be on the hook for an expensive medical bill if a shopper trips and breaks an arm. They want to rest assured that maintenance costs are not going to ruin them if a storm roars in and blows the roof of the joint. In today's writing, we will look closely at what product liability is and some proven risk reduction techniques. You'll probably save yourself a lot of grief down the line by doing your due diligence.

What Is Product Liability?

Product liability is the responsibility for harm incurred by the product on the part of the manufacturer, supplier, or seller of the product. Product liability-related lawsuits are based on negligence, strict liability, breach of contract, or numerous claims for consumer protection. At the state level, most product liability laws are decided and differ from state to state. Claims for product liability negligence are generally those alleging a design fault, a production defect, or marketing defects due to failure to warn about a possible defect.

Product liability insurance can help compensate for legal costs, such as attorney fees and judgments against you if property harm, sickness, accident, or death is caused by a product sold at your business. You may face a potentially expensive claim depending on the seriousness of the harm caused by the product or how cantankerous the injured party feels, so product liability insurance can be extremely convenient to have. To defend yourself, let's look at some of the strategies you should do.

Deal Only with Trustworthy Suppliers Offering Quality Goods

As most stores do in one way or another, if you rely on manufacturers and suppliers for your inventory, it can be tempting to go with whoever provides the best price. As a reference, don't depend on that. The adage “you get what you pay for” might not always be true, but in most cases, it will do you good. Take the time to study the suppliers to make sure they are up to scratch with their credibility, manufacturing capabilities, and efficiency. Convince yourself why, if the price is suspiciously low. Chancing a product liability suit to save a few bucks isn't worth it.

Have Your Website With a Detailed Terms and Conditions Page

The agreement on terms and conditions is a page on a website that sets out the rights and responsibilities of anyone who uses the website. A contract between the site and the user is effectively formed. Terms and conditions often include an explanation or definition of the key terms used in the terms and outline the legal limitations of the owner of the website's liability for any damage or damage caused during the use of the site.

A disclaimer indicating that you are not responsible for any concerns relating to your product will not absolve you of any responsibility, but it is a good idea to include a transparent and detailed page of terms and conditions that contains some clauses of limitation-of-liability. As advised by experts from Salvi, Schostok & Pritchard P.C. Chicago, limitation-of-liability provisions limit what a consumer can get from you in case of a product complaint. In other words, you can place a limit on the amount of money that the unsatisfied consumer has the right to earn. Notice that this doesn't mean it's enforceable simply because you have a limitation-of-liability clause. It needs to be equitable, transparent, and conspicuous, and enforceability varies by jurisdiction even then. Still, it won't do any harm to you.

Provide Detailed and Precise Descriptions of the Goods You Sell

The degree to which consumers can inspect and communicate with items is one apparent but substantial difference between online and brick-and-mortar retail. In the digital realm, up-close physical inspections are not feasible, meaning customers rely on e-commerce retailers to provide high-quality reliable explanations and images to help them inspect products and decide if they are secure or not. If you're not careful, it can turn into one big headache and a whole slew of unhappy customers one minor mistake in the way a product is described or advertised.

Investigate and Comply With Legislation on Consumer Safety

Never leave a child unattended, for topical use only and includes mature subject matter. These are all examples of advisories on consumer safety or warnings offering information on the risks associated with such goods and services. It is vital to attract new clients to your business, but you need to follow a few rules. Make sure to provide health information on the packaging if you market food items. You should get them approved by a regulatory body first if you sell electronics and want to advertise their energy efficiency. Study the legislation for your business and make sure that all the boxes are ticked.

Purchase Independent Protections for Product Liability

If you feel that your company is especially vulnerable to product liability problems, you might want to look into buying separate insurance policies for product liability. Companies that specialize in offering compensation that protects against harm and damages resulting from all sorts of product defects to suppliers, distributors, and sellers. Insurance brokers familiar with product liability will advise you on choosing a risk-covering policy for you. Just make sure to find a good person that knows the organization you are operating.

Most merchants claim that product liability should not affect them because their product is not overtly harmful. This is a risky way to think. If you run an online store, both your customers and your organization must have a firm grasp of the potential risks. Merchants who neglect product liability are vulnerable to complaints, disputes, and litigation, leaving themselves no remedy but to take full responsibility. Hope this article has shed light on the importance of e-commerce’ product liability.

Article written by Reginald Chan
A meticulous entrepreneur by nature and a serial entrepreneur. Founded a few awesome startups including Marketing Lancers, WP Maven and TheMarketingHuddle.com. Reginald is a sought-after success coach, digital marketing consultant and TEDx speaker from Asia. Currently, he teaches others how to make money online for free.

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