Six Tips for Reducing Your Company’s Product Liability Exposure

Edward Newsom started his COMPOSITES 2013 educational session “Product Liability Risk Management” admitting that attorneys aren’t beloved. “Most folks don’t much like lawyers,” said Newsom, partner of Smith Moore Leatherwood LLP. “But on those rare occasions when you need one, you want a lawyer who is going to go out swinging and never back down from a fight.”

Newsom and Steven Henry, another partner in the law firm, have represented composites companies in lawsuits. They shared insight on reducing corporate exposure to product liability litigation.
Product liability is all-encompassing. It is liability for a product you manufacture, design, assemble, formulate, sell or for which you provide a component. “Anybody in the product chain can be subject to product liability,” said Newsom.
Henry suggested that companies conduct product liability risk assessments to minimize the potential for product-related incidents as well as to comply with all laws and regulations, help with the provision of a defense if an incident occurs, and evaluate products and incidents through a product liability audit to help prevent or minimize future problems.
“The real goal is to create the evidence of good faith and product safety consciousness that’s necessary to minimize your company’s liability and defend against any product liability claim,” said Henry. He shared six steps for reducing your company’s risk in product liability:

  1. Perform a product liability audit. Ask questions about product safety, safety standards, design and development, labeling specifications for warnings, documentation concerning installation, product recalls and more.
  2. Design a reasonably safe product by staying abreast of state-of-the-art technologies, adhering to industry standards, keeping active in ACMA and correcting design defects as you learn of them.
  3. Manufacture the product as it was designed and without fault. Use quality materials and components, monitor the manufacturing process, inspect completed products and document everything.
  4. Incorporate adequate warnings and instructions to eliminate risks that could be eliminated through reasonable design.
  5. Train your personnel on product liability.
  6. Create a post-sale feedback system. Obtain product-performance information from distributors, sellers and end users.