Should I ask my manufacturer if they have product liability insurance?

Hi,

I have a question about getting sued. I think product liability insurance is a necessity for both the brand and the manufacturer, but if a brand were to get sued because its product caused an allergic reaction for example, isn't the manufacturer the one that is supposed to get sued? If the brand gets sued because of a "claim" on the product, then yes, it is the brand's responsibility as the brand chooses the wording. But for an actual formulation issue, isn't it the manufacturers responsibility to settle the lawsuit? Should I ask my manufacturer if they have product liability insurance?

Thank you so much!

Comments

  • PhilGeisPhilGeis Member, Professional formulator
    If your name is one the product, you are responsible.  A contract packer would be responsible for issues associated with manufacture - contamination, adulteration, etc. for which you would sue them.
    I'd ask - if they do not have liability insurance, do not work with them.
  • I see. Thank you for responding.  :)

    Can a brand get sued even if they list all the ingredients correctly, have CPSRs, and have warnings on the packaging?
  • GraillotionGraillotion Member
    edited May 12
    Yes.... YOU will be the one getting sued...if any suing is going to happen.  Lawyers will list all possible entities they think they can get $$$ from, but YOU will be the target.  Bottom line...make sure YOUR insurance is in order.  (And as mentioned, if you are going to sub out work, you will want to make sure they are insured as well.)
  • @cosmeticlearner
    You mean suing for an allergic reaction? This question is probably for a lawyer, but for example a fragrance consists of allergens that are not listed in INCI in US. In EU, some of them must be listed, but still not all possible allergens.
    https://www.sgs.com/en/news/2022/01/eu-changes-to-cosmetic-allergen-rules

    As for the insurance, you should ask about it,  and ask for a clause in the contract where the manufacturer is obliged to have such insurance throughout the duration of your contract.
  • MarkBroussardMarkBroussard Member, Professional Chemist
    @cosmeticlearner:

    Yes, you should inquire if your CM has liability insurance on the manufacture of your product, but they will most likely require that you carry product liability insurance unless they developed the formula for you and it is their intellectual property.  If there is an issue, the brand is the most likely first target of any lawsuit.  A lawyer will generally try to work his way up the chain to include the party with the deepest pockets.   

    I once had a client who got sued by a client claiming that her skin was burned by the client's hyaluronic acid serum that contained only water, sodium hyaluronate and preservative, so you can get sued with even the most benign product.
    Chemist/Microbiologist formulating in the Organic & Naturals & Clean Beauty arena under ECOCert/Natural Products Assn/Whole Foods/National Organic Program/Clean At Sephora/Credo Clean guidelines focused skincare & haircare products. 

    See website for details www.desertinbloomcosmeticslab.com
  • @MarkBroussard what was the outcome of that lawsuit? What is even the claim in lawsuits like this...do they claim that the product was contaminated, that it was made with unsafe ingredients, undisclosed ingredients, or what? How common are lawsuits like this against cosmetic companies any way?
  • MarkBroussardMarkBroussard Member, Professional Chemist
    @GeorgeBenson

    It was dismissed.  The product was properly formulated using common cosmetic ingredients.  But, you still need to spend money defending lawsuits regardless of the merits.  Not all of the consumers purchasing your products will be knowledgable enough to be discerning ... saw that word "acid".  I don't think actual lawsuits are that common in relation to the number of cosmetic products sold.
    Chemist/Microbiologist formulating in the Organic & Naturals & Clean Beauty arena under ECOCert/Natural Products Assn/Whole Foods/National Organic Program/Clean At Sephora/Credo Clean guidelines focused skincare & haircare products. 

    See website for details www.desertinbloomcosmeticslab.com
  • HrHHrH Member
    Hmmmm. This is an interesting one. I suppose they would be suing the company which may be an llc/ltd rather than the individual? Is there any protection from the 'do a patch test on a small area before smearing the product all over your body' statement that I will now be adding to my label?
  • PhilGeisPhilGeis Member, Professional formulator
    HrH said:
     Is there any protection from the 'do a patch test on a small area before smearing the product all over your body' statement that I will now be adding to my label?
    No.  You are responsible for the product, not the consumer in their normal cosmetic use.
  • JoyJoy Member
    Just a comment about the hyaluronic acid-related lawsuit, the person may indeed have had such a reaction to it. I make a super basic 1% hyaluronic acid "gel" for a family member who loves it, but when another family member tried it, their face turned red and it felt like burning. On myself, for my general skin it feels fine, but it burns on my lips. It is just water, 1% hyaluronic acid, and 1% optiphen plus, and the person has no reaction to the water or optiphen plus. So many people love hyaluronic acid, but for some it doesn't feel good! But still not something to sue over, since anyone can be allergic to anything.
  • PharmaPharma Member, Pharmacist
    If I (at the pharmacy = not neccessarily cosmetics but drugs, from OTC to presctiption over TCM etc.) outsource something to a contract manufacturer, we have to have a contract (it's mandatory for both of us) which includes who is responsible for what, no loopeholes. General copy-paste formats can even be found online but most if not all contract manufacturers here in Switzerland carry their own. In case of a lawsuit, it's fairly obvious who of us has to deal with it (it's theoretically an either-or situation, never a both unsless there were several issues to sue over). A liability insurance is therefore in anyones own interest (and likely everyone has one, it's Switzerland, we insure too much anyway but fortunately seldom have lawsuits).
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