Jump to navigation
RSS

Nov 12, 2011

When a company adopts certain management and operating principles, it can minimize or even eliminate products liability losses. Working these principles into your organization requires a systematic, coordinated loss control plan. At Haddock Company, we recommend that you consider these three components when developing your plan.

  1. A corporate policy on product safety
  2. A product safety coordinator or committee with clearly fixed responsibilities
  3. Specific loss control measures

Corporate Policy

An official corporate policy regarding product safety is essential to demonstrate top management's commitment. The written policy should explain the company's objectives (e.g., to design, manufacture, and sell products that are reliable and meet applicable regulations and standards). It should also indicate who in the organization is responsible for product safety, and how the program will be implemented and monitored.

Product Safety Coordinator or Committee

In the complex field of products liability, every department plays a vital role. Fixing responsibility is the only way to achieve the desired result. The size of the company will determine whether one individual can be designated as the product safety coordinator or a product safety committee should be formed. For smaller companies, it may be possible to have one person responsible for product safety along with his or her regular job duties. Larger organizations may need a fulltime coordinator or a formal committee to ensure products liability control.

Regardless of which structure you adopt, you should:

  • Initiate procedures that support company policy and objectives
  • Develop product safety training programs
  • Learn and communicate changes in codes, regulations and standards
  • Coordinate product safety hazard analysis
  • Participate in organizations developing improved product standards
  • Communicate with the insurance carrier's loss prevention and claims departments
  • Coordinate accident and product failure investigations and take corrective actions for customers
  • Maintain loss data including accident reports and warranty claims
  • Alert management to potential product recalls
  • Audit and evaluate the effectiveness of the products program
  • Report progress to management
  • Recommend corrective action

If you appoint a committee to handle product safety, some of the departments that should be represented on the committee are engineering, quality control, manufacturing, legal, safety, service, marketing/advertising and purchasing (including buyers if you are a retailer). Committee responsibilities may include:

  • Conducting program activities
  • Monitoring product performance
  • Submitting patent applications
  • Designing labeling and warnings
  • Processing warranty claims
  • Documenting product design
  • Documenting product modification
  • Reviewing product literature and advertising
  • Monitoring quality control
  • Reviewing and responding to accident reports

Loss Control Measures

Products liability loss control involves four important measures:

  1. Identifying the exposures
  2. Guarding against the accident
  3. Warning against the hazard
  4. Defending against claims

Identify the Exposures

Take a good look at each of your products to identify possible ways that they could cause or contribute to accidents or injuries. This evaluation should consider the entire life cycle of the product, from design through disposal. It should also include the environment in which the product will be used and foreseeably misused. Consider intended product users and unintended users, who may also be exposed to potential hazards.

Guard Against the Accident

Understand and apply safety principles concerning product design and manufacturing. Once the hazards are determined, install adequate protective devices. We strongly recommend that the complete physical protection package, such as guards, protective accessories or devices, etc., be included in the product price rather than being listed as options. If they are offered as options, the customers should sign off on their decision not to purchase them. Keep those records for defense. The purchase of quality components and the establishment of high quality manufacturing standards are essential to meeting performance requirements.

As technological safety advances are made, offer consumers retrofit packages to upgrade older product models. Again document these offers and the customer's decisions.

Identify critical pats of the product and indicate their rated capacities clearly, prominently and permanently. Professionalism in all product sales, engineering and field services becomes increasingly important. Sometimes, even the most thoroughly designed controls can fail and a product with serious hazards can be distributed. This situation may require a recall, and your program should include procedures for identifying and tracing specific parts or products. Without actually recalling a specific product, test the recall program to verify its effectiveness.

When dealing with a retail or wholesale situation, develop a system to ensure that recalled products taken off the shelves are not inadvertently put back out for sale by uninformed sales staff or merchandisers. Instruct the lead salespeople and department managers to ask customers if the products being returned for exchange or refund have been involved in accidents or near accidents.

Warn Against the Hazard

The controls in this area are based on clear, accurate and complete product literature and proper packaging and labeling. Advertising and public relations releases should reflect sound accident prevention measures. "Warning" and "Caution" labels and pictorial symbols will help, along with a complete instruction manual for each product.

When packaging and shipping hazardous products, it is essential that the carrier, warehouser, distributor and consumer know what they are handling and how to use it in a safe manner.

Defend Against Claims

Even the best laid plans for prevention may not eliminate all accidents and claims. The key to successful defense is advance planning. You should work closely with your legal counsel and insurance company. Consider the following:

  • An established policy for record preservation
  • A set policy explaining how to handle customer complaints and claims
  • Prompt reporting and thorough investigation of accidents and complaints
  • A claims philosophy established in advance with the insurance company
  • Legal review of product literature, contracts, disclaimers, warranties, etc.

By following these important steps, you can take your company a long way toward preventing and solving products liability problems.

For more advice and complete help in protecting your business, your employees and customers, contact us today.

 



More articles related to…


Bookmark our mobile site visit m.isu-haddock.com

Information you need, when and where you need it most. More »

Haddock Company Inc.

Jump to navigation

Convenient Locations in Idaho

Open Monday - Friday 8:00AM - 5:00PM

Additional navigation:

Home page | Contact | About | Companies | Service | Privacy | Disclaimer | Search
Licensed in ID, WA, MT, OR, CA, AZ, & KS

© 2017 Haddock Company Inc.