It’s astounding and perhaps a little bit scary that we see many importers with Chinese suppliers continuing to purchase and import products that pose a potential risk to consumers, kids, or pets without taking the necessary measures to test product safety and quality via a product safety program.
This problem became very clear in the early days of the coronavirus pandemic, for example, where there was a veritable gold-rush to purchase KN95 respirator masks from China, up to 70% of which later turned out not to pass relevant safety standards for their markets. OK, there may be a big difference between poor quality masks that make their way into hospitals and don’t provide the required protection and a product which cannot harm the user if faulty, but nonetheless, a mass recall of your products, whatever they may be, could be very damaging or even fatal for your business. Worst-case, if end-users did get injured could your company afford to be sued?
However, there is a way to mitigate your risks when importing products from abroad. Implementing a product safety program. Here’s why…
Something has gone wrong with your product and you’re grilled by a lawyer. How do you answer?
Imagine something goes wrong with your product and it injures a child. You might be asked these questions by American authorities in a deposition, for example (according to China Law Blog):
- How did you choose your China product supplier in the first place? What sort of due diligence did you do on that supplier?
- Did you clearly put your specifications in your contract with your Chinese supplier? Was your contract written so as to actually bind your manufacturer under Chinese law? How do you know that it was?
- Can you show me the provisions in your contract relating to product quality and safety? What product specifications did you require of your Chinese manufacturer? Is this in your contract with them? Where?
- Did you just go with what your Chinese supplier was telling you about the safety of its product or did you test it yourself? Please describe each and every product test you conducted.
- What exactly did you do to make sure the product you were getting from China conformed to your contract and to applicable U.S. product safety regulations?
- What made you first suspect problems with the product? Did you at that time immediately cease importing them?
- What would it have cost you per unit to fix the problems?
Can you answer all of these questions in a way that shows that you paid attention to product safety every step of the way?
Why product liability is an issue for YOU, the importer
Importers are almost exclusively liable for the products they bring into their markets. This means that you will be held responsible for any kind of damage or injury, even if this means paying fines or damages.
In some cases manufacturers (if you’re buying from them rather than using your own factory) may share some liability if this is made clear in an enforceable manufacturing agreement, but in general, your market’s authorities will come to you for answers.
As the importer of record, you’re likely to lose a lawsuit against a claimant who has been injured by your product in some way if the court sees proof that you were negligent in regard to consumer safety (for example, by not testing that the products reach your market’s safety standards). If you have implemented a product safety program, then this will provide you with a great deal of protection against the accusation of negligence, as you have recognized the importance of product safety before importing it for sale in your market.
Today the law has progressed to such a degree that ‘absolute liability’ is becoming recognized and that users may be absolved of any responsibility for injury, even if they used your product unreasonably, if the product caused a hazard which could have been found through a risk analysis, correct testing, etc.
So, the best way to avoid such liability is to be very certain that your product is safe 99.99% of the time.
What is a product safety program?
A product safety program would typically include:
- Overview of related product safety regulations & standards
- Analysis of the ‘human factors’: who will use the product, in what conditions and for what purpose, and how could they misuse it?
- Successive reviews of, and actions about, product safety risks at each step of the development
- A formal risk assessment plan – this is usually blended with a quality & reliability risk assessment
- A quality assurance plan that includes compliance testing, reliability testing, product inspections, etc. and that targets all the high and medium risks across the supply chain (including at the material/component level)
- Treatment of the residual risk (which hasn’t been eliminated) through user warnings etc.
Some of these points are further expanded on in this post about toy safety tips (including valuable tips for everyone, not just relevant to new toy developers alone).
Benefits of implementing a product safety program
An easy answer to any misgivings about the time and resources required to set up a product safety program would be that the cost involved is likely to be a fraction of the costs of the litigation and damages stemming from a consumer’s injury.
It’s a great form of insurance because by following such a program you’re likely to have uncovered almost every risk that could, if left unchecked, result in consumer injury in the field and, therefore, cause costly liability for your business, long before the products reach the end-user.
If you consider the plan outline, the majority of the activities are completed before the product hits the market, with the exception of: ‘Treatment of the residual risk through user warnings etc.’
Even for unexpected faults that occur and only become apparent to you once the products are in use in the field for some time, the program is beneficial as allowances have been made to make batches of products traceable. Therefore, as soon as a problem occurs, you’re able to put out a hazard, modification or recall notice and therefore fulfil your responsibility to warn users about ‘post-sale hazards.’
Have you implemented a product safety program yet? Let us know by commenting, please.
Are you designing, or developing a new product that will be manufactured in China?
If you want to learn even more about reducing risks, then you’ll also like this free eBook. Sofeast has created An Importer’s Guide to New Product Manufacturing in China for entrepreneurs, hardware startups, and SMEs which gives you advance warning about the 3 most common pitfalls that can catch you out, and the best practices that the ‘large companies’ follow that YOU can adopt for a successful project.
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