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Distributors Importing Safety Products From Developing Countries and China May Be Significantly Increasing Their Liability Exposure.

As a distributor, all the research and product specification confirmations you review before deciding to import safety products from China may still leave you open to risk.

Usually, in cases where injury arises from a defective product, the manufacturer is held responsible because they were in control of the design and assembly of that product. Distributors, however, aren’t 100-percent free of risk, particularly when it comes to importing from manufacturers in China and the developing world.

Why?

Most companies from Asia do not have product liability insurance, can’t cover claims in the United States or other litigious developed countries such as Canada, Australia and the EEC, or they do not have nearly enough coverage to accurately manage the severity of some accidents.

Safety products are highly regulated in the U.S. by federal and state agencies. Here is how you can protect yourself and ensure your company is offering the best quality safety products.

Risks if you Buy Protective Apparel from China

Described as having the “broadest and most comprehensive manufacturing infrastructure in the world” Chinese manufacturing plants vary widely in terms of production, quality, and infrastructure. That variation may result in the following risks that can impact and ultimately transfer the risk to the distributor.

  • Noncompliant with U.S. Standards.
  • No U.S. product liability coverage.
  • Refusing to take responsibility and has no assets in the U.S. against which to claim.
  • Repackaging under the distributor's name.

All of these above-mentioned risks apply equally if you buy from an importer here in the U.S., or from another country with strict product liability laws, who does not carry adequate insurance or against whom there is not adequate recourse. Many importers are very lightly capitalized – not much more than a telephone and a desk – so buyer beware!

Workman's Compensation Coverage

Worker’s compensation is required in the U.S. for all companies to protect injured employees and ensure that employees receive adequate wage replacement and medical benefits. Workers comp also shields employers from any further liability no matter how severe the accident.

However, in the event of severe injuries like fire or chemical burns, trial attorneys for injured employees look to the manufacturer to settle the claim. Typically protected by product liability insurance for situations where products cause injury or other damage to third parties, manufacturers carry limits of up to $10,000,000 USD. This covers severe burns, for example, as well as injuries involving multiple people in a single accident.

Asian contractors or Asian made goods purchased by a U.S. or foreign based master distributors or brokers, may not be fully insured to cover similar situations. In fact, most insurance companies, if not properly informed of the exact nature of the business and liability, may deny insurance claims of distributors, brokers or other non-manufacturers in the supply chain.

What Happens if Your Apparel is From China or Other Developing Countries?

Product liability insurance isn’t mandatory or required by law. Asian manufacturers rarely have any insurance to cover product liability claims in the U.S., Canada,Australia, the UK or EEC.

For distributors, this means you are taking on most of the risk. Severe burn cases are some of the most common workplace injuries with over 40,000 hospitalizations per year. They result in injury claim awards of up to $ 1,000,000 - 10,000,000 USD.

The claim risk doesn’t end there. Most safety apparel from Asian countries is not being constructed according to U.S. or European standards. This violation can surface during lawsuits and injury claims, also uncovering potentially counterfeited certifications and documents that falsely advertised the products as fire-resistant or having passed strength tests, for example. Such findings result in quick guilty verdicts and high punitive damages.

What Can You Do To Ensure the Highest Quality Personal Protective Equipment?

To protect yourself and your company don’t hesitate to ask for proof of insurance and require that the insurance coverage be backed by a U.S., Canadian or EEC based company. You should also be able to ask that the coverage includes you as an insured party. Asking for the following basic information and details will help protect you from Asian manufacturers that cannot offer this.

  • Certificate of Insurance - Certificate of coverage from a U.S., Canadian or EEC based insurance company that names you as an insured party.
  • Insurance company - Look for an insurance company that has the best ratings with a coverage amount of $10,000,000 USD or more.

When in doubt, consult with a qualified product liability attorney. Don’t open your company to risk, which may result in high punitive damages. A qualified attorney will ensure that your business is in compliance with applicable requirements and has the proper coverage for all aspects of your business, including imported products.

To reduce the risk even further and remove the stress of purchasing imported products, the U.S. based Lakeland Industries has complete product liability coverage should there be a claim. Our products not only have a proven track record of superior garment performance but, more importantly, they comply with the safety regulations of all major markets should your customer export them.

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