There is a significant market in the United Kingdom of internet traders working from home on a full time and a part-time basis selling a wide range of new and second hand goods and products both into the UK and abroad.
Many use Ebay and other marketplaces, some sell their products via their own branded web sites and what was for many a hobby business has developed into a significant undertaking. Many of these people may be unaware of their legal responsibilities in respect of the products they sell that arise in both common law and statute.
As the supplier of a product you have responsibilities under the Consumer Protection Act 1987 and The General Product Safety Regulations 2005 regarding the safety of products you supply and under the terms of the CPA you have a strict liability in respect of any injuries arising as a result of a defective product.
In addition to these statutory responsibilities you also have potential liabilities under common law e.g. negligence for any product that you may supply.
Am I still responsible for products that I have not manufactured?
Yes you have responsibilities attaching to the supply of the product. In reality, if an injury or damage occurs as a result of a product any action will likely be taken against the manufacturer but what if the manufacturer is no longer trading or is located elsewhere in the world where legal action may not be easy to enforce? Then you may be in the firing line.
Am I responsible for the sale of second hand products?
Yes the Consumer Protection Act 1987 section 10 of the act removed the sale of second hand goods from the legislation and this has established itself in conventional wisdom however The General Product Safety Regulations 2005 repealed section 10 and included second hand goods. Only the sale of antiques is excluded from regulations and second hand goods that are covered by the following exclusion that appears in the Act;
These Regulations do not apply to a second-hand product supplied as a product to be repaired or reconditioned prior to being used, provided the supplier clearly informs the person to whom he supplies the product to that effect.
How can I protect myself from actions arising from the sale of goods?
The product liability insurance policy is designed to meet this need for you. It is almost always provided alongside a public liability insurance policy and it protects the policyholder against claims made against them in respect of their legal liability arising from the supply of a product.
The product liability policy covers you in respect of any awards made against you and also the costs of mounting a legal defence to a claim whether you are ultimately held liable or not. This provision of legal defence costs is a very important aspect as the costs associated with dealing with even the most speculative of claims can be particularly damaging, perhaps catastrophic, to a small business.
In terms of the cover itself, the policy protects you in respect of your legal liabilities, however they may arise whether under statute such as the Consumer Protection Act or under common law in the case of negligence. It is tempting to identify areas of the Consumer Protection Act and feel that you do not have a responsibility under the legislation, this may be true, but it does not remove your responsibilities in common law!
How can I buy product liability insurance?
You can apply on-line for a quote or better still you can call a member of our specialist liability insurance team who will be happy to discuss your requirements with you and provide you with a product liability insurance quotation. More information is available on the main product liability insurance page.