Distributors should make sure they are protected against product liability claims, experts say. Customers are pushing liability for faulty products up the supply chain, according to William Marler, managing partner with law firm Marler Clark, in the article The Growing Cost of Product Liability.
“Ten years ago, I would very seldom see indemnity agreements with a contract to a middle man laying out the details of everyone’s liability and what people should have for insurance. … I now see that all the time,” he says.
Here are a few ways distributors can protect themselves, according to Marler and other experts:
- Ask suppliers to name them on insurance contracts.
- Form reasonable indemnity contribution contracts between wholesalers and suppliers.
- Consider general liability insurance, especially if repair, installation or maintenance is part of the package.
- Make sure that the right products are used in the right applications to avoid liability in the case of a system failure.
Read more about The Growing Cost of Product Liability for distributors.