US Product Liability - Do I Need it?

[KA6WKE]

Thanks for reading.

I have a few low voltage - 15vdc products in mind. I'm working on the business side getting my ducks in a row and I got to thinking about product liability and what to do about it. I'm thinking if I manage to sell 100 of these devices I'd be ecstatic! This business won't be my main source of income, it's a side business. Would I need PLI for such a small amount of devices sold? Searching for PLI information returns what looks like snake oil companies. Any pointers on this subject? This is for the United States but my product could be sold world-wide.

Thanks!
Mark

[CM800]

Well, its a matter of cost-risk analysis.

If you feel the risks are so low, that you have zero chance of your product causing injury / damage that could get you sued, then maybe not.
But if it is possible, and you don't feel like taking the risk, then you likely do want to.

It's all a matter of how much you value not getting sued / imprisoned / whatever.


I am not a legal consultant, consult one, this is just my opinion, i'm not responsible for what you do... blah blah blah.

[Conrad Hoffman]

The only good advice would come from a lawyer. That said, you probably can't afford it, maybe several kilobucks a year. Anybody can sue anybody here for just about anything. If you don't have enough assets to make suing you worthwhile, the odds are less that it will happen, but it still could. What are the product risks? IMHO, selling anything dangerous if you're exposed to liability is nuts. Can it electrocute somebody? Can it start a fire? Can you drop it on your foot? Can a child swallow any parts of it. Does it have batteries? Does it have a cord somebody could trip over or hang themselves with? Could it distract somebody while doing something else? IMHO again, the best bet for power is an approved wall wart, not direct line connection. If you're going to sell it elsewhere, can you get a CE mark? Even if you self-certify, going through the standards (that you have to buy!) will tell you a lot. BTW, if it has a clock or digital circuits, it might need an emissions test to be sure it passes FCC.

[metrologist]

I sort of face the same thing with a machine shop and since it would be a one person, part time thing, there is no profit after coverage, so no point.

But then there are companies selling bare wire mains water heaters without a care 

[rsjsouza]

That is highly dependent on the product itself. We commercialize a low-voltage, low power product powered by USB2.0 (2.5W max) that was deemed well below the threshold of safety compliance either for US, EU, Korea, Japan and China but, as with everything else in this game, you need to have someone officially tell that to you or else you are liable.

[jbb]

This may be a job for some kind of limited liability company.   That way a lawsuit against the company can (hopefully) be firewalled off from your personal assets (e.g. savings, a house if you're lucky enough to own one).

But I am in New Zealand where the liability situation is quite different, so talk to a lawyer, and be prepared to pay for it.  If you want to minimise your spend on said lawyer, you should book a meeting (in person is better if possible) and list the items you want to discuss (e.g. limited liability options, insurance, separation of personal and company assets, taxation issues to be aware of).

[CJay]

Find a lawyer, don't ask in forums.

[rfeecs]

I'm not a lawyer, either.  Would forming an LLC (Limited Liability Company) help?  Seems to be cheap an easy to do.

[CM800]

The reality is, even a 2.5W USB toy has risk to it. If the unit is incorrectly designed, there could be traces that heat up enough to ignite something on / near it to cause a house to burn down.

[jmelson]

I'm not a lawyer, either.  Would forming an LLC (Limited Liability Company) help?  Seems to be cheap an easy to do.

And, I'm not a lawyer, but my understanding is no.  An LLC limits your financial liability if the corporation goes bust and leaves debts.  But, it WON'T isolate you from liability if somebody gets hurt, property is damaged, etc.

Jon

[Mr. Scram]

That is highly dependent on the product itself. We commercialize a low-voltage, low power product powered by USB2.0 (2.5W max) that was deemed well below the threshold of safety compliance either for US, EU, Korea, Japan and China but, as with everything else in this game, you need to have someone officially tell that to you or else you are liable.

Who even tells you this? I don't think there is anyone who can guarantee anything about selling a product in all those places. If someone takes offence and sues, you'll need to defend yourself in court.

[iainwhite]

An LLC limits your financial liability if the corporation goes bust and leaves debts.  But, it WON'T isolate you from liability if somebody gets hurt, property is damaged, etc.

Not quite - Yes, you are personally liable if you are negligent or commit fraud or are reckless or commit illegal actions resulting in harm to others. However, if for example, an employee commits a reckless action, you are not personally liable if said action was beyond your control. 

[CatalinaWOW]

The only good advice here is to consult a lawyer if you have any worries whatsoever or any assets.  Your risk is likely to be low based on sales quantities and the relative hazard of the product, but no matter what your product is the risk is not zero. 

I will add, based on personal experience, that just as in engineering the quality of the practitioners varies.  At the low end your consultation will provide value comparable to asking on a forum, and will cost nearly as much as one of the competent guys. 

So the really good advice is to do a lot of market research on lawyers and then consult at least one.  If you get the same answer from both you can have some confidence in the result.  And then for giggles, and to calibrate the answers, ask the following questions:  "How much will it cost to follow this advice?"  and  "If I follow this advice to the letter am I completely protected?" and "If I follow your advice do you incur any liability?"