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Are Inventors Responsible For Product Liability?

By: Kevin Watson MSc - Updated: 27 Oct 2012 | comments*Discuss
 
Inventor Product Liability Insurance

There’s always the chance someone will blame an invention for injury to a person, or damage to property. Is the inventor responsible, however, for the injury or damage?

The General Legal Position

In general terms, the legal position is as follows. A third party, known as the ‘claimant’, may hold as legally liable, any individual or business responsible for causing an injury or damage. This means that a claimant may sue an individual or business for compensation as a result of an injury or damage.

Once a court establishes that an individual or business is legally liable for the injury or damage, that individual or business must pay the compensation. The individual or business also has to bear the cost of all legal fees, including the claimant’s, and possibly the claimant’s medical bills, even if the NHS gave the treatment.

The Product And The Law

As far as a product is concerned, the law is specific. If someone supplies a product that’s faulty, the supplier may be liable for any compensation claim. This is because a physical product sold or given away has to be ‘fit for purpose’.

The supplier, rather than the manufacturer, is responsible if the name of the supplier’s business is on the product; the supplier imported the product from outside the EU; or the supplier has repaired, altered, or reconditioned the product.

If a claimant cannot establish who the manufacturer is, or if the manufacturer is no longer in business, he or she may also hold the supplier legally liable for the product.

When the above conditions relating to suppliers do not apply, the manufacturer is legally liable to face claims for compensation.

In those instances where a product consists of parts from a range of manufacturers, the business that assembles the product is liable.

The Inventor

How does all this law affect an inventor?

An inventor may come up with an idea for a product, and pass this to a company that handles manufacturing and supply. In this circumstance, a claimant is unlikely to seek compensation from the inventor in the event of an injury or damage.

If an inventor is also the manufacturer, and possibly the supplier, of a product, the situation is different. In line with the law as described here, the inventor may face a compensation claim.

Many inventors are entrepreneurs who take a direct interest in the running of companies that manufacture and market their inventions. They must therefore stay aware of their liability if a product is faulty and causes personal injury, or damage to property.

Product Liability Insurance

An inventor who is also involved with manufacturing and/or supply needs product liability insurance. This covers against injury to a person, or damage to property that a product may cause.

When considering product liability insurance, the best advice is to discuss matters at length with an experienced broker. The insurer will need to know that manufacturing and supply staff have received necessary training; all relevant equipment involved in the manufacturing and supply process is in good working condition; and all processes meet industry standards.

Premiums for product liability insurance vary according to the business. The cover is usually between £1 million and £5 million.

ResponsibilityAre inventors therefore responsible for product liability? It depends whether or not they are also the manufacturer, and possibly the supplier. If they are, they may be legally liable for the products created from their ideas.

Even so, an inventor who simply produces ideas should still check that the company entrusted with the manufacture and supply of a product has appropriate product liability insurance. It’s best to be on the safe side.

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