Product Liability Update for Retailers: Inherit the Whirlwind

03.01.12 | Permalink

By: Jacey Kaps

The whirlwind builds slowly starting with a phone call, claim or suit papers hitting the inbox of the risk manager or in-house counsel. The matter involves a claim that a product sold at one of the chain retail stores is defective resulting in serious injuries. However, only the retailer is the subject of the claims. From this moment pro-activity is the standard operating procedure. The claim materials must be promptly and thoroughly evaluated for the next action steps including careful review and analysis of the claims and options for claim handling, including seeking indemnity from the product manufacturer. Typically a retailer will contract for indemnity with a product manufacturer as part of its preliminary negotiations. However, there are circumstances such as manufacturer bankruptcies and spoliation where a retailer may be challenged in its attempt to tender a matter to a manufacturer or where indemnity may be unavailable leaving the retailer with defense as the only avenue.

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