As the Canadian currency losses ground against the US dollar, Canadian products and services become much more attractive to purchasers in the United States. Many Canadian businesses are capitalizing on this and are actively pursuing export opportunities. Whether you are selling goods and services directly to US customers or selling through your website you should take a moment to consider your liability risk.
Product liability risk is a type of legal risk that arises due to the manufacture, distribution or sale of products that are alleged to be defective, unsafe or dangerous. Claims can be brought against the manufacturer, distributor or retailer. Although product liability may not be proven against any of the parties, the financial impact of the claim alone can be significant due to the cost of defending the action, particularly if you have to retain US-based legal counsel.
Exporters should consider:
- Becoming knowledgeable on consumer laws and requirements in the jurisdiction in which you intend doing business. Significant restrictions exist for certain types of goods being sold in the US so some research is essential. The Consumer Product Safety Commission is a good resource to start business research.
- Reviewing the terms and conditions of any contracts to ensure that they contain adequate protection from liability, at least to the extent allowed by relevant consumer protection legislation. Check with your legal representative to ensure you are adequately covered and that the terms and conditions of your contracts are appropriate for an export business.
- Review your liability insurance to ensure that you have policy coverage and liability limits that are reflective of the US legal environment. You should consider including defence costs and claims management coverage on your policy as the US can be a very litigious society and the costs of defending a claim, even an unjustified one, can be excessive.
“It is not the strongest or the most intelligent who will
survive but those who can best manage change.”
