The tension spirals back and forth in the marketplace, between the need of consumers to find products that function properly and are safe, and the need of manufacturers to create new products without crushing expenses from strict regulations and high insurance costs. Companies have to calculate all sorts of expensive risks into their production costs. For example, they have to be able to cover a big financial hit from product recalls, failures, repairs or refunds. They are required to produce quality consumer goods, yet in a way that allows them to stay solvent if such a financial loss does occur.

Strict regulations are required; there’s no doubt about that. When consumers find products to be defective, it’s not just when they might flick a switch and have nothing happen. Sometimes the defect is discovered when they sustain a severe medical injury or other major loss. Even corporations feel a financial hit in such circumstances, from loss of productivity, loss of business, a slowdown in the market, and so on. It’s in their best interests, ultimately, to have these regulations in place, even though they and their product liability lawyers usually try to claim otherwise.

So the tension exists with a sort of spiral effect. Consumers find defective products and launch law suits to recover damages, have the products recalled, or have the products changed. Companies faced with high liability costs include them in their manufacturing production costs, and pass those on to the consumers, who then demand that since they’re paying those extra costs, the regulations had better be tightened, which increases the manufacturing costs further. And so it goes.

As a result, insurance companies are attempting to straddle the two considerations, consumer vs. manufacturer, and help them all find products – liability insurance products in this case – that will aid in keeping the tensions balanced, rather than spiraling out of control. Product liability policies exist in a basic form, and then are tailored to a specific company’s needs by liability professionals. Some cover tempering or product recalls, while those might not be needed in other policies. This can help reduce insurance costs. The ultimate goal is for the market to carry quality, consumer goods that work properly and are safe. Ensuring the safety of consumers while not crippling producers is the balance that must be maintained.

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