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How do you protect against a product liability claim?

The moment you put a product on the market, you're exposing yourself to the risk of a product liability lawsuit. That fact is a just a byproduct of being in business in the first place.

What, then, can you do to lower the risk that your company will end up in a lawsuit over one of its products?

1. Use good components

Your product design won't be enough to protect you if the materials you use are defective. Make certain that you thoroughly vet your suppliers before you use anything they send. Initiate quality control checks on all incoming supplies to make sure that you're able to catch any problems.

2. Test your products carefully

There is no such thing as "too much testing." Putting your product through rigorous testing to make sure that it doesn't pose an unreasonable or unexpected hazard to consumers in some way is one of the best ways to protect your company. (It's also a good way to gain credibility with consumers. You can let your customers know that you take your responsibility toward them seriously.)

3. Use warning labels

Almost everyone has seen a warning label on a product that seems a little silly or excessive. Just the same, you're better off going overboard with a warning than not being clear enough. In addition, make sure that you provide clear instructions about your products use.

4. Get product liability insurance

These days, any business that produces a product for sale should have product liability insurance in its defense arsenal. Going without it is asking for trouble.

Losing a product liability lawsuit can cripple even large companies. For a small company, a loss in court can be so devastating that the company may never recover. The estimated cost to businesses from product liability claims amounts to around $12 billion every year. If you're facing the prospect of litigation over a product your company produces, don't hesitate to seek sound legal advice.

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