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How to reduce liability at your manufacturing plant

Every manufacturing plant will have liability insurance. Liability insurance is known as Worker's Comp Insurance and it protects the company from claims of negligence. If an employee was injured on-site, they can claim liability insurance and their costs will be covered. The employer will be protected from legal claims if the employee does try to sue the company. Another part of liability claims is product liability. Product liability is usually filed by a consumer that is suing the company for negligence. If your company wants to avoid lawsuits, they need to look for ways to reduce liability. Here are a few simple tips to help you reduce liability:

  • Watch for design defects
  • Watch for manufacturing defects
  • Provide information to the public if you find a product defect

Even though it may be hard to recall all of your products that may or may not have a defect, it is much cheaper to do this than to try and settle a claim for an expensive lawsuit. During the initial design phase of the product, you need to test it for every possible thing that could go wrong with the product. Some consumers simply do not read the instructions and they could incorrectly use the product and injure themselves. Even through it is not your company's fault, most claims that are cited as "incorrect use" will favor the person filing the claim.

To prevent claims of strict liability, your company must also look at the manufacturing phase of the product. Are the machines working properly? Is there a problem with the manufacturing phase that could be prevented? Even if you are not negligent in making the product, your company could still be held liable if the court finds the product was defective.

Another way to reduce liability is to downsize your workforce or your equipment. If you are producing products too quickly, you may be letting the defects slip right through the cracks. Some of your employees may not be performing their jobs properly and this can cause defects to get out the door. Always make sure your managers are evaluating their staff members and providing them with feedback. Keeping the workplace flowing effectively is a simple way to reduce liability.

If your equipment is too big, downsize to smaller machines that are more manageable. Perhaps your plant is too small, expand to a larger building or move some of the machines around to create more space for your staff members.

Installing safety features like anti-fatigue mats, air testing equipment, and visual control methods can reduce liability. When you make small changes to benefit the health of the employees, your insurance rates will decrease and it can reduce workplace accidents. You want to give the liability responsibility to each employee rather than assume it. If an employee is injured through no fault of the company, then they have to file for Workers Comp Insurance rather than file a liability claim against the company. If you can take preventative steps, it is much easier to walk away from a claim without paying any money.

Hire a consulting firm to come through your manufacturing plant. Have them test the equipment for defects and have them go over each product to find out if there are potential hazards with any of them. A consulting firm can also help you look at the initial design of your products and they may have suggestions about what you can change that will reduce liability. Prevention is the key to reducing liability. If you are not sure how to get started, always seek professional help. A simple investment now can save your manufacturing company thousands to millions of dollars later on down the road.

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