{"id":5110,"date":"2016-04-04T10:47:57","date_gmt":"2016-04-04T15:47:57","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/liability-and-insurance\/the-small-business-owner-and-product-liability.html"},"modified":"2024-05-23T02:26:54","modified_gmt":"2024-05-23T07:26:54","slug":"the-small-business-owner-and-product-liability","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/the-small-business-owner-and-product-liability.html","title":{"rendered":"Product Liability and Your Small Business"},"content":{"rendered":"\n
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Product Liability and Your Small Business<\/h1>\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Susan Mills Richmond, Esq.<\/a>\n | Last reviewed\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Defective or dangerous products cause thousands of injuries every year in the United States. Product liability law, which sets liability for injury caused by defective or dangerous products, differs from ordinary injury law. These laws can make it easier for an injured person to recover damages.<\/p>\r\n

Product liability law<\/a> refers to consumers holding the manufacturer or sellers liable<\/a> for placing a defective product into the stream of commerce. When a small business owner<\/a> opens their doors to the public, they also create a potential product liability claim.<\/p>\r\n

This article reviews how product liability affects business owners. Keep in mind that employee injuries are generally covered by workers’ compensation insurance<\/a>, which you can also learn about on FindLaw.<\/p>\r\n

What Is a Product Liability Claim?<\/h2>\r\n

There are no federal product liability laws. Under state laws, products must be suitable for the purpose the customer expects. Defective or faulty products are unsuitable for use.<\/p>\r\n

If a defective product causes injury to a consumer, they can bring a product liability claim against everyone responsible for bringing the product to market.<\/p>\r\n

State laws affecting product liability focus on negligence<\/a>, strict liability<\/a>, or breach of warranty<\/a>. Commercial statutes based on the Uniform Commercial Code<\/a> also affect product liability. Product liability claims are expensive for small businesses.<\/p>\r\n

Responsible Parties<\/h2>\r\n

Product liability only affects products sold in the marketplace. That is, someone must have purchased the item from a retailer or wholesaler. If you buy something at a yard sale, product liability doesn’t apply.<\/p>\r\n

A product must "enter the stream of commerce." Someone must sell the product in the course of business. Any individual or entity involved in the chain of distribution bears some liability. Multiple parties may be involved, depending on the product’s complexity.<\/p>\r\n