Nowadays, it’s fair to say that no business is safe from a product liability claim. Whether you manufacture consumer products or industrial equipment, a product liability lawsuit can cost you millions of dollars, crippling your business and annihilating any hopes for sustainable growth.

As a manufacturer, it is up to you to ensure that your products are safe for public use. Warning labels simply don’t cut it anymore. This dedicated guide will highlight all the essential steps to protect your business from a potentially damaging liability lawsuit.

Test Your Product Thoroughly

Regardless of your activity sector, product safety is paramount. You must operate with the assumption that a product can never be tested enough. From R&D to manufacturing, continuous testing will alert you to any possible defects and allow you to recall dangerous or faulty products. Failing to conduct effective research and tests every step of the way can expose you to negligence. For that reason, always make sure to take all necessary measures to ensure a product’s safe use, from your supply chain to the final consumer.

Provide Clear Labels and Warnings

Mentioning disclosures on the product’s packaging, especially dangerous ones, is an important line of defense for any manufacturer. Whether it’s cosmetics, cleaning detergents, or heavy machinery, provide appropriate warnings and educate your customers on how to use or operate the product safely. Without clear warning signs, this opens you up to all sorts of liability claims. As mentioned, keep in mind that proper labels and warnings do not exempt you from all other aspects listed here.

Hire Legal Counsel

Invariably, keeping a specialized attorney on retainer will go a long way in averting major future crises. They’ll inform you of product liability rules, common issues, answer your concerns, and suggest ways to optimize your manufacturing practices. Besides, the Virginia-based legal experts at Lichtenstein Law Group explain that having an experienced lawyer by your side will be your most valuable asset in litigation cases or settlement negotiations. Since this can be the difference between paying $20,000 and $1,000,000 in damages, any responsible business owner won’t risk taking any chances and will hire the best counsel there is. Be sure to prospect specialized attorneys in your area.

Subscribe to Product Liability Insurance

Another complementary step to protect yourself against liability claims is to take out product liability insurance. While it isn’t mandatory, any product manufacturer or distributor who wants to avoid going bankrupt should be covered under all circumstances. This type of insurance typically covers the compensation that is to be awarded to a plaintiff, namely the individual who’s suffered injury or harm as a result of using a faulty or defective product (along with legal and procedural fees). Since not all product liability insurance provides the same type and extent of coverage, pay attention to the fine print and consult with your attorney before signing anything.

Review Your Suppliers

Most businesses out there have suppliers and partners whose activities are necessary. As such, ensuring that the product parts or components you receive from your suppliers play a crucial role in your liability as an owner or distributor. To avoid taking the blame for a supplier’s or contractor’s shortcoming, whether during the manufacturing or shipping process, make it a point to enter a contract that holds them legally responsible for any product defects that may arise on their end. This isn’t intended to “throw them under the bus,” but the last thing you want is to suffer the consequences of someone else’s mistake.

Uphold Your Business’ Reputation

Lastly, but importantly, don’t let a product liability claim erode your professional credibility and status as a manufacturer. The truth is, not only can being the target of a liability lawsuit (even a bogus one) set you back big time financially, but it can also diminish consumer trust in you and your venture.

That said, transparency, strong PR efforts, and a new marketing strategy can go a long way to help you make amends, maintain your reputation, and guarantee a growth trajectory for your business. At this point, you may want to consider bringing in external consultants and advisors to aid with the brand image, business development, and more.

As damaging and costly product liability lawsuits can be for businesses, there are plenty of ways to be proactive and keep troubles at bay. Ultimately, it all starts with your own testing standards and safety protocols; the more rigorous you are, the less likely you’ll be to expose your business to liability claims. Hopefully, by following these steps, staying safe and growing your business will be just within arm’s reach.