Whether your business manufacturers cars, laser-cutting machines, pharmaceuticals, or toys for children, protecting you and your company against products liability actions brought by consumers may seem impossible. You are a business owner that runs your company just like your machines - precise, efficient, calculating, and safe. However, no matter how much careful planning is involved, there are always issues that arise that no one can anticipate. There will always be inherent risks that accompany a manufacturing business, but taking the steps outlined below will help protect you from liability and may also help protect your customers as well.
#1 Allocation and Transfer of Risk
From the very beginning, you should work with an experience attorney who can assist you in drafting documents that will help insulate you and your company from liability. This includes the drafting of hold harmless agreements, which will ensure that suppliers and sub-contractors in the supply chain are responsible for their own negligence and other mistakes. In addition, including financial responsibility statements will ensure that you will not be left financially responsible for others’ mistakes, because another contractor or supplier will have to have certified that they are carrying the appropriate insurance.
#2 Make Safety Paramount from the Beginning
Safety concerns should be of utmost importance, especially during the design phase. This may seem obvious, but most hazards and risks can often be limited or cut out completely during the initial design phase. Multiple safety reviews should be conducted during the design phase by multiple different employees who can offer different perspectives and ask challenging questions. It is essential to brainstorm all of the different ways this product will be used – and misused, in order to best protect against physical and economic injury. In addition, ensure that your products comply with all government safety standards, as well as though common in your industry. Compliance with these standards will help you further strengthen your argument in the event of a lawsuit that you took all steps necessary to ensure you were manufacturing a safe product. Lastly, your products should ALWAYS contain appropriate and extensive labels. It is better to be over-cautious.
#4 Proper and Thorough Record keeping
While it may seem obvious that proper and thorough record keeping is essential to any business, you would be surprised how many manufacturing businesses struggle to keep thorough records, which always comes back to haunt them in a plethora of ways. Keeping solid records not only helps businesses track progress and meet goals, but also helps the businesses comply with relevant regulatory requirements and prepare for litigation in the future. Among other things, you should make sure to keep records of: 1) Design specifications and all orders, including customer final approval of designs, 2) Procedures and instructions for ensuring the product is safe through the manufacturing process and quality control, and 3) A document retention policy, which will ensure all necessary documentation is stored safely in case it is needed in the future
#5 Do Not Forget About or Ignore Feedback!
Do not ignore your customer feedback! Reviewing and responding to customer feedback is not only critical to showing customers you truly care about them and value their loyalty, but also for providing a barometer of how your products are doing and whether there are any safety issues or defects you that you did not manage to catch. This information can help you take steps early on to minimize exposure of any incidents and also to fix the issues before they are exposed on a much larger scale.
While there will always be some unforeseeable issues that will arise, you should take the above steps and work with an experienced attorney to ensure that you have covered all of your bases. This will help your business grow and be more prepared for the future.