By Importers need to be aware of who pays for a product liability claim on a product they are importing from their foreign manufacturer.
In this article, we will share with you everything you need to know as an importer about product liability insurance. But before then, let’s look at some of the mistakes you should try to avoid at all costs when importing into the United States.
Mistakes U.S. Importers of Foreign Products Must Avoid at All Cost
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Poor choice of products, undercapitalization, lack of well-researched business plan and failure to figure out all the cost implications of importing are some of the terrible mistakes imposters in the United States are making.
It’s common for importers to assume that their foreign manufacturers will share some liability in the event of a Product Liability Claim in the U.S. This often happens when the foreign manufacturer says they have a Product Liability policy.
You may need to find out if the foreign manufacturer’s policy has an endorsement specifically stating it covers Product Liability claims in the U.S. courts. If the foreign manufacturer doesn’t, then that foreign Product Liability policy is useless to the importer. Don’t import it.
In fact, having product liability insurance coverage from the foreign manufacturer should be the deciding factor whether you should import a product or not.
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Why It’s Important that Importers Verify the Authenticity of a Product Before Importing It into America
Importers are at the top of the pyramid regarding responsibility for ensuring the products brought into the U.S. are safe for use by the American public.
Importers are commonly classified as manufacturers for insurance rating purposes by the insurance carriers. This is because any Product Liability claims involving manufacturing defects will stop with the importer.
If you are an importer, don’t assume that foreign manufacturers have your back. They won’t be responsible for any product liability claims brought in the U.S. involving your imported products. More than likely you will be on your own handling any and all Product Liability claims.
Why is Product Liability Insurance Important in the United States?
The role product liability insurance plays in the United States is to help protect you against the cost of compensation for personal injuries caused by your faulty product, loss of or damage to property caused by your faulty product and unforeseeable circumstances such as product faults that your quality control system could not identify.
Do Wholesalers and Manufacturers Need Product Liability Insurance?
Many of the customers to whom you sell your products will require the manufacturer, distributor, or wholesaler to have liability coverage.
