Product liability: the exposure that survives being fully compliant

Two tests, run by different people, at different times

Regulatory compliance is assessed against published requirements by an authority, generally before or during sale. Civil liability is assessed after harm has occurred, by a court, against a standard concerned with what a person was entitled to expect from the product. Evidence of having followed the applicable regulatory route is relevant and helpful in that second setting, but it is not conclusive, because the standards a product met may not have addressed the failure that occurred. Businesses that conflate the two tend to under-invest in the things that matter in a claim: traceability, complaint handling and the quality of the instructions supplied.

Harm comes from design, from making, or from what you said

Claims typically fall into recognisable shapes. The design itself creates a risk that a safer alternative would have avoided. The design is sound but a particular unit was made wrong, which is where batch traceability and process control become the argument. Or the product is as intended and the failure lies in what the user was told, or not told, about assembly, limits, maintenance and foreseeable misuse. That third category catches manufacturers who invest heavily in engineering and treat the manual as an afterthought, and it is the one most easily improved without touching the product.

The claimant picks who to pursue, and it may not be the maker

Regimes commonly allow an injured person to reach the manufacturer, the party that imported the goods into the jurisdiction, and whoever put their own name on the product as though they had made it. Component suppliers can be drawn in too. Contractual indemnities between businesses redistribute the cost afterwards but do not stop a claim landing, and they are only as good as the counterparty still existing, being solvent, being reachable and carrying insurance that responds. Own-brand programmes concentrate this exposure precisely where the commercial upside sits, which is a fact worth pricing rather than discovering.

Insurance covers part of the ground, and the gaps are predictable

Product liability cover responds to third-party injury and damage. It does not usually pay for replacing the defective goods themselves, for the cost of running a recall, or for lost business, each of which needs separate cover or a balance sheet. Territorial limits matter enormously for exporters, since a policy written for domestic sales may exclude the market where the claim arises. Retroactive dates, aggregate limits, defence cost treatment and exclusions for particular applications all deserve reading rather than summarising. Brokers who understand your sector are worth more than a cheap premium.

The defence is built years before the claim

What helps in a dispute is contemporaneous evidence: the hazard analysis and why decisions were taken, test results, the batch record for the unit involved, the instruction sheet as it was issued at the time, complaint records showing that signals were reviewed, and proof of what the state of technical knowledge was when the product was designed. Retention policies that outlive the product's service life are part of this. Liability regimes, limitation periods and available defences differ substantially between jurisdictions, so nothing here is legal advice; obtain it from a lawyer qualified in the markets you actually sell into.

Frequently asked questions

We met every applicable standard. Can we still face a claim?

Yes. Standards address the hazards their authors considered, and a claim concerns the harm that actually happened, which may sit outside that scope. Compliance evidence is genuinely useful because it shows a deliberate, competent process, and in some regimes it supports specific defences. What it does not do is convert into immunity. The gap is widest for novel products, unusual user groups and foreseeable misuse that no published test method examines.

Our component supplier indemnifies us. Does that solve the problem?

It helps with cost recovery and does nothing about the claim arriving at your door. Test the indemnity against realistic scenarios: is the supplier solvent and reachable, is the governing law and forum workable from where you sit, does their insurance cover the territory where your goods end up, are the liability caps meaningful next to a serious injury claim, and does the wording survive the supplier being acquired. An indemnity from a small overseas supplier is often worth less than the paragraph suggests.

How long does exposure continue after we stop selling a product?

Long enough that record retention should not be set by warehouse convenience. Limitation and long-stop periods vary between jurisdictions and are usually counted from events such as supply, discovery of harm or the date of injury rather than from the date you discontinued the line. Because the periods differ, businesses selling into several markets commonly set retention against the longest one that could apply to anything they have shipped, and keep the evidence in a form somebody can still open.