subject: Wholesale Distributors Insurance And Liability Issues [print this page] Wholesaler-distributors, as well as manufacturers, can be subject to a wide variety of laws and regulations governing product liability. Any injury, big or small, resulting from a product distributed by a company can create a cause for a claim, hence the need for wholesale distributors insurance. Injuries can occur in a number of unforeseen ways due to contact with a recently purchased product:
Bodily injury may arise from the product itself
Property damage losses can also occur
The product packaging can result in an injury
Instructions for use, labels, warnings and other "on product" messages
The manufacturer, not the distributor is usually held responsible for injury arising from a defective product, because the distributor generally has no control over the design, assembly or quality of the item. However, wholesaler-distributors may be held liable for product defects under certain circumstances, including:
1.Those who provide installation, service or repair work as a "value-added" service for their customers, which may increase their product liability exposure in the process.
2.If they modify, repackage or re-label products they may assume a greater liability than those who don't. Modification of the product can include any modification of instructions or warranties.
The United States has some of the most stringent product safety standards in the world. When goods are produced overseas, they do not necessarily comply with these standards. When a wholesaler imports products from a foreign manufacturer who does not carry U.S. product liability coverage, they can assume the product liability exposure.
When the distributor is directly responsible for the defective condition (i.e. if they have damaged the product while repackaging, or by making product modifications) they may be held liable for product liability, or if they had knowledge of the defective condition prior to the sale and did nothing, they can also be held accountable. A significant number of federal and state laws and regulations impact product liability, and it is important to be familiar with them.
Consumer Products Safety Commission (CPSC)
The Consumer Products Safety Commission is one of two federal organizations that oversee many products going to market. They are charged with protecting the public from unreasonable risks of serious injury or death from more than 15,000 types of consumer products under the agency's jurisdiction.
Food and Drug Administration (FDA)
The FDA is also responsible for protecting the public health by assuring the safety and efficacy of human and veterinary drugs, biological products, medical devices, the food supply, and products that emit radiation.
Because many more federal and state regulators have oversight with regard to product safety, as well as the diverse nature and applicability of state product liability laws, it is always wise to consult a qualified products liability attorney to ensure that any business is in compliance with applicable requirements.
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