The organizations dealing with the production of products that are perishable, flammable or can get harmed easily require the insurance against such products. The reason for insurance is the liability attached towards the product. Product can be defined as a processed raw material which is achieved as a finished goods and can be easily sold in the market. It is easy to use as is fully converted to be consumed by the customer.
Liability is the charge that can result into a situation which can create a situation that is a monetary loss for the organization.
The risk of monetary loss gets triggered as soon as the situation turns into reality. The vulnerability attached to the product matters the most in defining the level of the liability that is to be borne by the organization. The insurance policies serve as a protection gear for the company to protect itself from such vulnerability. The risk can be controlled by protecting the product by buying an insurance policy that is available in the market.
The laws that are especially dealing to resolve the issues that are around the situations that can cause product liability can provide justice to the victim. The punishment can be a fine or imprisonment all depends upon the law applicable on the land in which the situation has been hit. The responsible authorities must be aware about the whole picture as well as the pros and cons of the whole situations. The disaster recovery plan must be implemented accordingly by the same. The responsible persons must be aware about the contingencies attached towards the product liability. Legal advisor are the main experts who can guide the company while framing the policy as well as can take good care of any possible plaintiff. The cases that are result of the satisfaction of the situation that is primarily a vulnerability and finally a damage caused after the threat hits the business activity. The importance of the product liability is in-deep and its impact can be analyse by the importance of going concern assumption that gets hit as soon as a contingency which was not identified causes negative impact on the financial position of the company up to that higher extent.
Awareness, implementation, calculation, assumptions, expertise, updating at regular interval, etc. can contribute towards the coverage of the financial loss and controlling the possible contingency. The financial authorities of the company can contribute towards the policies that can protect the finance of the company. The product liability can be measured with the help of a legal expert. The insurance policy that has been adopted by the company can serve as pillar that strengthen the existence of the business. The organization must be aware about the possibilities of various actions that can be taken by the authorities when any vulnerability hit the product. The maintenance of the product quality is very important for the recognition of the liability attached to the product.
The type of liability many differ according to the product type and form. The variability vary according to the factors highlighted above and the ultimate conclusion can be achieved.
The laws that are abiding on the product are having importance that cannot be overlooked. The difference among the laws is according to the land that differ. The litigations that are filed by the victim against the defaulter need legal expert to bring them towards the conclusion. Legal expert can be an advocate, attorney or a person having qualification as per bar council. The various lands have various name for the expert but one thing is common among them, it is having knowledge about the laws that are binding on the land. The major issues that are faced by the company as a result of the litigation being filed against it not only limit itself to the financial loss but also extends towards loss of reputation.
Low level of knowledge about the various possibilities and the legal background that is required by an organization always results into an unexpected situation. The knowledge about the same can be attained by getting in contact with the legal expert that can guide the company in the best possible manner. The product needs a recognition by the market and such recognition can cause possibility of being accepted widely and resulting into a rivalry by the competitor. The near replacement offered by close competitor is the biggest threat for a product.
They are always looking towards the loop pole and company needs to cover them all up, never give a chance for being the target. Whenever a brand is targeted, brand value is adversely affected and the quality is questioned which results into the product liability. The charge that has to be paid by the company that has been established after the threat being hit to the possible situation. The company needs to make a proper provision for such contingency in its financial statement, so that it reflects the true and fair view of the financial position of the company. The interest of the public is a stake if such contingency is kept hidden. The company is required by law to make proper disclosure of the same and when the type of organization is a limited company, it is expected to be transparent about each and every aspect that can affect its financial position in coming future. The money invested by the public needs to be protected by the company, their stakeholders are the real owners of the business and interest of the same is of utmost importance for the company.