Manufacturing can be a lucrative business if you are choosing to produce the right products. A company that has an efficient manufacturing line can keep the costs of production low while still earning a good margin on the finished product.
Unfortunately, while there is room for a good gross profit margin, all companies in the manufacturing industry will face the risk of lawsuits if they produce defective products. Here’s what you need to know so you can avoid expensive, damaging lawsuits:
What Is Manufacturer’s Liability?
Manufacturing companies have liabilities. Under federal law, manufacturers and sellers are both responsible for consumers or property that is harmed because of a defective product that was sold on the market. The manufacturer could be held liable for harm for a few different reasons. The three bases where manufacturer’s liability is determined include:- Negligence during the manufacturing process that leads to defects
- Failure to warn consumers about dangers present when using a specific product
- Breach of warranty by failing to fulfill claims made about the performance of a product
- Strict liability when the manufacturer is still held liable for defectives when none of the above apply
Consider the Risks before Choosing a Product
If you own a new manufacturing company and you are trying to decide on a design or prototype that you might be interested in mass producing, think about the risks. The materials, equipment, and man hours that are needed to get mass quantities of a product off the line in a reasonable time frame will always have an impact on whether or not it is a risky product to reproduce in terms of product liability.
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Focus on a Testing Protocol
The best way to ensure that a single product or a batch of products is not going to wind up defective is to plan a testing protocol that all employees in the plant need to be aware of. Routinely testing a handful of products on the line at every stage in the step-by-step process will help to assess the items for defects and remove them from the production line before reaching the marketplace.Only Source the Best Parts
There are a lot of moving parts in the manufacturing process both literally and figuratively. When sourcing materials and parts for machinery in the plant, source evaluation measures should be taken. Since many part distributors have an indemnification clause built into the contract to hold the manufacturer liable for product liability suits, evaluating the company is crucial.Retain a Good Lawyer
No matter how many steps a company takes to test products and develop streamline cycles in the manufacturing process, there will always be people interested in making a buck. Some examples of litigious individuals include the case of Sanford Clardy, who tried to sue Nike for $100 million after he claimed he was not warned his shoes could be used as a weapon when he assaulted a man.While he did lose, Nike did have to pony up and pay their attorneys to argue that evidence was not filed to show there was any type of defect. When you retain a good lawyer or team that knows the ins and outs of product liability, such as Harris, Steven W, you can avoid these unscrupulous suits.
Being new to any type of industry can be intimidating. Manufacturing poses some unique challenges for newcomers because there is a huge exposure to liability suits. Be sure to learn from the mistakes of other companies and always focus on measures to prevent defects before they ever happen.
By 
Dixie Somers | Embed |
Author Bio - Dixie is a freelance writer who loves to write about business, finance and self improvement. She lives in Arizona with her husband and three beautiful daughters. | |
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