In most developed countries, the government enforces very strict regulations about the safety standards on consumer products in order to ensure the well being of its people. These regulations are particularly strong on goods intended for children such as toys and children’s wear. If we in inadvertently make goods with some potential, we may get ourselves in very serious situations.
When a consumer is hurt, or killed due to the fault of the product of the product or malfunction of the product, the consumer or his/her relatives may sue the retailer who sold these goods and/or the importer who imported these goods and /or the manufacturer who made these goods for a very large amount of money and stand a good chance to win. The amount payable to the victims is usually so big that it may put a company out of business. There are 3 parties involved—the retail store, the importer and the manufacturer. It is very difficult to say who should be responsible and to what extent without letting the judge see the contractual details and study the process in which the order was handled.
If the hazard is discovered when the goods are made or shipped but not paid for by the buyer, he may find a way to cancel the purchase of these goods. If the goods have been received and paid for by the retails store, the store may return these goods to the importer or want the importer to sign an agreement of indemnity and then keep the goods, for the importer to take over the entire liability. When the hazard really turns into an accident, the importer will be responsible but he will do this best to shift the responsibility on the manufacturer.
In view of the above complexity and intricacy due to the interrelated elements, usually the retails store, the importers and manufacturers would cover the product liability insurance. One should consider doing so if one has not taken it. A small minimum may save us a lot of grief.