Just because a business is covered by a product liability insurance policy, the business can be indifferent about ensuring safety to its employees as well as its customers.
In some cases, employees who suffer an injury because of a product that its employer makes may still sue its employer.
However, it can be a rare occurrence since employees are covered by The Workers Compensation Act. The provisions of this Act may sometimes be eluded if there is a third party agreement that is in force.
As manufacturers, each product has to be made that pass quality standard. In this respect, the role of the person who oversees quality control is very important. Samples are taken at random to check if the products that are being manufactured are produced and designed based on its purpose.
Production of a lot of defective products that reach consumers can besmirch the name of the manufacturer. This, in turn, tears the reputation and goodwill of the manufacturer. It, in itself, is very costly.
The worst thing that can happen is when the product is released, sold and injures or kills its user or members of his or her family.
The tragedy can result in a nasty lawsuit so having
product liability insurance coverage is critical.
Not to mention the bad publicity and damage to its name. Sometimes, with this misfortune, competitors take advantage of the situation and take away market share.
So much is lost to the manufacturer – its name, medical expenses for the injury or burial assistance if the consumer dies and the cost of litigation or settlement. Add to this, the cost of attorney’s fees.