Risk

Product Liability

If you sell it, you're in the chain — and if you imported it, you're effectively the manufacturer. Product liability doesn't care that someone else made the thing.

  • Intermediate
  • 6 min total
  • 10 chapters

What decision this helps you make: Whether the products you sell carry exposure you've never priced — and which layer of defense (testing, warnings, insurance, entity separation) to add first.

What this topic is

Product liability is the exposure of everyone in a product's chain of commerce to injury and damage claims — through manufacturing defects, design defects, and failure to warn. Sellers are liable for products they didn't make; importers typically stand in the foreign manufacturer's shoes entirely.

Why it matters

One injury claim can dwarf a product line's lifetime profits, and small sellers systematically underprice the exposure because "we just resell it" feels like a defense — it isn't. The layered defenses (testing, warnings, traceability, insurance, entity separation) are each cheap relative to the claim they blunt.

Who should learn it

Anyone selling physical products — especially importers, private-label brands, and marketplace sellers sourcing overseas.

What you will understand

  • See the chain: liability attaches to sellers, not just makers
  • Learn the importer rule: importing makes you the manufacturer in practice
  • Know the three theories: manufacturing defect, design defect, failure to warn
  • Build the layers: testing, warnings, traceability, insurance, entity separation

Prerequisites

Common misconception

"I just resell it — the manufacturer is liable, not me." The chain of commerce disagrees: retailers and distributors can be liable for products they neither designed nor made, and if you imported it, the practical reality is sharper — the overseas factory is beyond the customer's reach, so the domestic importer stands in the manufacturer's shoes. "Someone else made it" is a fact about production, not a defense about liability.