When it comes to making and selling products, businesses face a real risk: if something goes wrong, they can be held responsible. But there’s a rule called strict product liability that goes even further. It means a company can be blamed for a defective product even if they did everything right during production.
Rachel Pinsonneault, a commercial lines staff underwriter at Central Insurance, explains that strict product liability holds manufacturers accountable for harm caused by their products, regardless of whether they were negligent. This is different from the usual negligence rules, where injured people must prove the company was careless in design, labeling, or manufacturing.
Examples make it clear why this rule matters. If a bag of chips makes someone sick, or faulty wiring causes a house fire, or a ladder breaks while someone is using it normally, the company can be held liable even if it followed all safety checks. Strict product liability is often seen as a “no excuses” rule because it focuses on the product’s safety, not the company’s intent.
This rule exists to protect consumers and push companies to put safety first. It also makes sure that if someone gets hurt, they don’t have to fight a long legal battle to prove negligence. Pinsonneault points out that this law encourages firms to test their products carefully so dangerous items don’t make it to the market. It also helps even the score between regular people and big companies, so those harmed don’t face the costs alone.
But strict product liability isn’t the same everywhere. Each state has its own laws, some with no strict liability at all. The time allowed to file claims, called the statute of repose, also varies widely. For example, states like California, Georgia, Illinois, and Michigan have short deadlines, while Maryland gives much longer periods. Rules about who pays damages can differ too. In some states, one company may pay everything, while in others, costs are split based on fault percentages.
Because these rules change a lot from state to state, Pinsonneault says it’s important to work with lawyers who understand local laws to know the full risks and defenses.
Even though companies can be held liable no matter what, there are ways to reduce risk. Pinsonneault suggests building safety into every step of design and production. Clear labels and warnings are important, especially about how to use a product safely and limits like weight or age. Hazardous products should be installed only by trained experts. Keeping good records and having solid insurance coverage can also help.
Insurance plays a key role here. Even the safest companies can face claims if something goes wrong. General liability insurance can cover these claims if product liability isn’t excluded, but often manufacturers need a special policy for completed operations and products. Reading and understanding insurance policies is essential so that companies aren’t caught off guard.
Central Insurance, with over 100 years of experience, offers support tailored to these challenges. Through a network of independent agents and strong claims and loss control teams, they help businesses stay protected and ready for whatever comes their way. This support allows companies to focus on growing their business with confidence, knowing their risks are managed.