Does your company produce a product? If so, your customer buys that product expecting a very specific result. Sometimes, it fails. When this happens, it could cause an injury to your customer. This can become a liability incident for you. Preventing thisimage of women on production floor is critical. Even though your business insurance often covers product failures, it is best to minimize the risk. How do you do that?

Work to Determine Why Failures Occur

At the heart of this process is understanding why the damage occurs. Why did the person suffer injury or loss? Why did the product fail? This is also the most complex area to understand. However, to prevent them from occurring again, you need to know what the risks are now. Here are some examples.

  • The Instructions

Your customer didn’t read the directions. This may sound like it is not your fault. However, if the directions are complex or hard to understand, this creates liability. Are the instructions clear? Do they discuss the risks?

  • The Assembly

Your product failed because of its assembly. This is another key concern. Do you have staff in place to ensure the item meets specific quality assurance goals? For example, is there someone to inspect the work before it ships to the customer? This could eliminate the risks associated with the loss.

  • The Design

When a customer buys a product, he or she expects it to accomplish some task. If this does not happen, the product fails. It could be the result of the design failing. For example, a product may explode in the hands of the user. This may be due to using inferior metals or a poor safety design. Preventing this from happening again means going back to the design process.

How to Prevent These Risks?

As noted, prevention here focuses on addressing the underlying cause. However, it is also important to put in place some steps to minimize risks.

  • What quality assurance measures can you take before items go out to the customer? Do you test and reinforce problems?
  • Do your staff members have enough training? Perhaps they need more training on the functionality of processes?
  • Do your staff members over-promise or under-explain how to use the product?

Correcting the underlying cause of product failures is critical. Know that you have business insurance in place to minimize some of these risks, though. Your agent can work with you to better understand the steps necessary to prevent concerns.

Also Read: Does Your Business Have Business Interruption Insurance? It Should

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