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Product Liability is One of the Biggest Risks to US Businesses

Product Liability is One of the Biggest Risks to US Businesses

Many businesses have to deal with the issue of product liability these days. And it’s important to consider what this actually is, and why it affects businesses so much. Basically put, product liability is where the manufacturer or seller is liable for any faulty or defective products that are sold. Placing a potentially dangerous product in the hands of the consumer leads to thousands of injuries every year in the US.

And it’s not just the completed product itself that can fall under this category. Indeed, US law dictates that any product found to fall short of customer expectations can also be counted. There are many reasons why a product might be faulty or defective. And trying to figure out who is ultimately responsible can be very complicated. Product liability in the US is governed by state laws, so there may be subtle differences. But, overall it’s important to understand that they more or less cover the same sorts of things.

US businesses face a lot of risks every single day. But, when it comes to problems that affect the company product liability can often be the most damaging. So, it’s vital to look at why product liability is such an issue, so business owners can work on addressing the problem.

Products Represent the Business

The most important thing for people to remember is that products represent the business. A lot of the time the only experience people will have of a company is its products. And that’s why it’s important to ensure they are the best possible quality. Customers will make judgments about a business based on the quality of their products and services. And so product liability cases can have a severe and negative impact on any brand. Just think about General Motors (GM), and the liability cases they have faced. In fact, check out www.investopedia.com to find them on the list of the five largest US product liability cases. They have since become known as the poster child for product liability in the United States. This is a stigma they might never be able to get rid of, and it has had a hugely negative effect on the company.

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People Remember

It’s also important to think about the long-term impacts this will have on a business. It’s been proven that people are more likely to remember bad experiences than good ones. And so, if there are problems with product liability people will remember this. And it may be enough to ensure that they never use the business again. Also, it’s worth noting that customers talk to each other, and to their friends and family. A bad reputation will be talked about for a long time, and is almost impossible to get back. People are not going to forget the time they bought a defective product in a hurry.

Bad Publicity

They say that any publicity is good publicity, but this is disingenuous to say. For businesses, in fact, any publicity is not always a positive thing. Sure, they want to get their name out there and be eating up column inches, but this needs to be for the right reasons. Bad publicity can have a hugely negative impact on a business. And you need to visit www.technori.com for ideas on how to deal with it And, these days, it’s impossible to stop the flow of bad press once it starts. This is because of things like social media, and the pervasive power of the internet and social media. Once someone comments and puts a post online it’s out there for the whole world to see, and some bad comments can ruin a company these days.

Product Liability is One of the Biggest Risks to US BusinessesImage Via Pixabay

Lose Working Relationships

One of the major impacts of product liability is that businesses are set to lose working relationships as a result. It makes sense to look at things from the perspective of affiliates. People are going to want to be associated with a business facing a product liability claim. No company is going to want to tarnish themselves with the same brush. And, as a result, once the case or claim is filed companies may find their business colleagues pulling support and dropping out. The long-term effects of this can obviously be catastrophic for any business, especially a new startup. So, companies really do need to appreciate the severity of a product liability case being filed against them.

Costs Lots of Money

In the business world money plays a huge role and can shape the future of any company. The goal of a successful business is to make as much money as possible. It’s also important to make customer service a priority as well. But, no company can thrive and endure without making money. And it’s important to think about how much money can and will be lost in the event of product liability. There will have been a lot of money spent on developing the products themselves. Then more money is spent on marketing the products and more still spent on legal fees and compensation claims. The financial implications of a product liability case can be crippling for a business.

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Waste of a Product

Imagine you are a business owner and you have spent months or even years conceptualizing an idea. You’ve designed prototypes, and you’ve carried out tests. You’ve spent a large percentage of your budget developing the product. The company has coughed up and paid lots of money to produce thousands of these products. Then imagine there is a problem in the design or manufacturer, and you’re left with loads of faulty products. This is not only a huge waste of time, effort, and money. But, it also means you are stuck with loads of products you can’t sell. You’ve wasted them, and can do nothing now but throw them out. The idea has also been ruined as well because any subsequent efforts will be associated with the original defective idea.

The Buck Stops With the Businesses

Another thing that business owners need to understand is that the buck stops with the company. The problem with a lot of these cases is that the companies might be receiving the products when they are already defective. Then they sell them to consumers without realizing that they are defective. The problem is that this is the responsibility of the company to make sure they are selling the right products. Customers will ultimately hold the company responsible because they bought the product from them. So, businesses need to protect their reputation by making sure they check all their products before selling them. They have to carry out tests when they receive them from their affiliates. This helps reduce the likelihood of damaged or defective products. And it guards the business against product liability claims.

Product Liability is One of the Biggest Risks to US BusinessesPicture Source

In Serious Cases There Could Be Injury or Death

It’s not just the reputation and future of a company that’s put at risk through faulty products. In serious cases, there might be injuries or deaths caused as a result of faulty products. This is obviously a horrendous thing for anyone to have to deal with. There are a lot of ramifications that the company will face as a result. Being responsible for the death of a human being is something that can really badly affect people. It can also forever destroy your business and your reputation. Who’s going to want to get involved with a company that is responsible for someone’s death?! The answer, not many people, if any. This is one of the more extremes outcomes of defective and faulty products. But, it’s another reason why product liability cases can be so damning to a company.

Extreme Compensation Claims

Of course, anyone who has fallen foul of faulty products will want to file a claim for compensation. There are plenty of law firms out there that are specializing in taking on product liability cases. A visit to www.BlackandJohnson.com shows the kinds of firms specializing in this. And many of these firms are famed for the tenacity with which they pursue claims. It’s pretty clear that in a product liability case the company is going to have to shell out a lot of money. People want to be compensated for the loss, damage and emotional hardship they might have faced as a result. And they certainly deserve to be in this sort of situation. Because of how much the world has changed and adapted there are plenty of law firms now dedicated to this. So there are a lot more options for consumers wishing to make a claim, and some of the claims can be for huge sums of money. That’s why this is such a big problem for businesses all across the US these days.

Product Liability is One of the Biggest Risks to US BusinessesPixabay

There are so many risks to modern American businesses, but it’s clear that product liability claims represent a huge one. And it’s so difficult for a lot of companies to keep on top of this problem and check their products. Having stringent quality control systems in place is a good way to make the business risk free, and so is working with reputable affiliates. Product liability is always going to be a problem that modern companies face. But, by being careful and thorough many businesses will be able to significantly reduce the risk of product liability.

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