Posted April 3rd, 2020 in Top Stories, Legal Insights with Tags COVID-19, COVID-19 Products
How Manufacturers and Retailers Can Protect Themselves from Product Liability Exposure During COVID-19
The pandemic has forced many product manufacturers and retailers into uncharted territory. As COVID-19 progresses throughout the United States, it is affecting everything from the workforce, to supply chains, to even the availability of recall remedies. During these times of rapid change, it may be difficult for companies to remain diligent on product safety issues. However, product manufacturers and retailers can take a few steps to ensure they are protecting themselves not only now, but in the long-term, from product liability lawsuits or fines from the Consumer Product Safety Commission (CPSC).
Stick to Your Product Safety Plan
Large scale disruptions may affect your ability to stick to your product safety plan. Many employees are working from home and may not have access to technology or reporting mechanisms that were available in the office. It’s important to remind everyone to stick to the product safety plan and your incident reporting system. Employees should be made aware of the guidelines and procedures, including any shifts in the reporting mechanisms, for alerting the appropriate personnel of safety incidents. Document retention issues should also be addressed, particularly if employees are using their own technology at home.
Be Diligent With New Products and Suppliers
During this time, companies may be moving quickly to develop and sell new products or may have supply chain disruptions. This could include the loss of a key supplier or difficulty sourcing replacement parts. Although time is often of the essence, as delays can shut down production and sales, it’s important not to sidestep your normal due-diligence efforts with respect to product safety, starting with the design stage and continuing through marketing and sales. Any new suppliers should also be fully vetted with vendor and supply agreements carefully reviewed.
Remember Your Obligations to Report
The CPSC has reiterated that during the pandemic, companies still have a statutory obligation to under Section 15(b) of the Consumer Product Safety Act. As a reminder, a company must report to the CPSC within 24 hours of obtaining reportable information. The CPSC encourages companies to report potential hazards even while their own investigations are continuing. However, if a company is uncertain whether information is reportable, the company may spend a reasonable time investigating the matter. That investigation should not exceed 10 working days unless the company can demonstrate that a longer time is reasonable under the circumstances. In the current climate—where travel is discouraged and communications with consumers may be affected—companies should document their attempts to investigate product incidents and potential hazards that may be hampered by the current pandemic.
There are additional risk mitigation strategies companies can use during this time, including reviewing insurance policies, planning for potential supply disruptions, and identifying product risks and appropriate warnings before the release of new products.
Every product manufacturer and retailer is facing unique circumstances and hurdles as they work to keep their businesses running. Product companies will, and already have, experienced an unprecedented change to their operations, and it’s essential during these times to remember the vast array of steps a company can take to protect itself from future vendor and product liability litigation, regulatory violations, and CPSC fines.
If you have any questions or would like more information to navigate these issues, please contact DJ Warden or Brandie Morgenroth.