By Eric Austin, Risk Management Expertise Specialist
In nearly every industry and sector, there is potential for error and unforeseen circumstances. It is critical for businesses that are involved in the selling and distributing of products to implement and maintain a product liability program to reduce their company’s overall risk.
A product liability program is a set of policies and procedures a business puts in place to reduce the risk of product-related injuries and lawsuits. The program should be designed to identify and control hazards, train employees on safe product use, and respond to product-related incidents.
How to Create a Product Liability Program
To create a product liability program, a business should first assess its risk. This involves identifying the types of products it makes or sells, the potential hazards associated with those products, and the likelihood of those hazards causing injuries. The business should also consider the potential costs of product liability claims, including medical expenses, lost wages and legal fees.
Once the business has assessed its risk, it can develop a product liability program to address those risks. The program should include the following elements:
- Hazard identification and control: The business should identify and control any hazards associated with its products. This may involve redesigning products, adding warnings or instructions, or providing training to employees and customers.
- Employee training: The business should train its employees on safe product use. This training should cover the potential hazards associated with the products, as well as the proper procedures for using and maintaining them.
- Incident response: The business should have a plan in place to respond to product-related incidents. A plan should encompass procedures for reporting incidents, investigation, and corrective action.
Product Liability Across Functions
When building a product liability program, the business should also include multiple business functions. This should always include the following departments:
- Engineering: The engineering department should be responsible for identifying and controlling hazards associated with products.
- Manufacturing: The manufacturing department should be responsible for implementing the hazard controls identified by the engineering department. Note, this function may also encompass quality control, if assigned to the manufacturing department.
- Quality Control: The quality control department should be responsible for ensuring that products meet safety standards.
- Sales and Marketing: The sales and marketing department should be responsible for providing customers with accurate information about the risks associated with products.
- Customer Service: The customer service department should be responsible for responding to customer inquiries about product safety.
By including multiple business functions in its product liability program, a business can help to reduce the risk of product-related injuries and lawsuits.
Keys to Program Success
Once the product liability program has launched, there are important steps to take to ensure it continues to run effectively and efficiently. Consider these tips for creating and maintaining a successful product liability program:
- Ensure the program continues to be tailored to the specific risks of your business.
- Obtain input from all relevant departments when developing and reviewing the program.
- Train employees on the program and ensure that they understand their responsibilities.
- Review the program regularly and make changes as needed.
- Keep records of all product-related incidents and take steps to prevent future incidents.
By following these critical steps, businesses can help to protect themselves and their employees from the possible financial and reputational costs of product liability claims.
The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information, content, and materials contained in this article are for general informational purposes only. Further, this information may not constitute the most up-to-date legal or other information.
