How COVID-19 Impacts Product Liability Claims

COVID-19 and Product LIability

COVID-19 related products are in the crosshairs of litigating attorneys

To the casual observer of a product liability lawsuit, the large number of defendants named on the lawsuit stick out. It often appears everybody in the stream of commerce and then some are named as defendants in Product Liability lawsuits. The plaintiff’s attorney uses the legal principle of “res judicate.” Simply put, it means the same lawsuit cannot be brought twice as rationalization for naming any party that could remotely hold any responsibility for the bodily injury or property damage product liability claim.

Why attorneys shotgun so many into lawsuits

In theory, the legal rationalization for naming all potential responsible parties is a good one. That’s because the non-guilty parties often point fingers at the guilty party. This speeds up the proceedings. Unfortunately, this also creates an opportunity for plaintiff attorneys to increase their income by naming as many defendants as possible on the lawsuit. The plaintiff’s attorney COVID-19 claim settlementswill try to drop a boatload of discovery cost on the defendants to push for higher settlements to get their names released from the product liability lawsuit. The more discovery a defendant must process, the more expensive the settlement. For example, if it costs the defendant’s insurance company $10K to process the discovery materials presented by the plaintiff’s attorney, the insurance company will make a business decision and may offer $8K as a settlement to get their name dropped from the lawsuit.

Attorneys not necessarily interested in in prevailing on merits, but forcing settlements from many defendants

The truth is plaintiff attorneys care less about the merits of case. They care more about the number of cases and defendants they can name. Even if they lose the case, they stand to profit by the number of settlements defendants willing to pay to get their names released from the lawsuits.

Strict Liability

Plaintiff attorneys will be looking to prove that the product in question was defective, based on the legal principle of Strict Liability. In other words, was the product defect the result of a manufacturing defect, design defect or an instruction or warning defect? The plaintiffs can use one, two or all three of these claims in their product liability lawsuits to try and prove the product was the approximate cause of their injury. Other legal principles such as negligence and breach of contract can also be used. But those principles can be harder to prove, so the majority of product liability lawsuits are based on Strict Liability.

When discussing the products targeted, I address what I consider the low hanging fruit or the easiest for plaintiff attorneys to pursue. Those products covered under the Public COVID-19 productsReadiness and Emergency Preparedness Act (the PREP Act) receive immunity against claims resulting from the manufacturing, testing, development, distribution, administration and use of approved drugs, biological products and devices to diagnose, mitigate, prevent, treat or cure COVID-19-related illnesses. Also, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), extends immunity to products and technologies intended to improve the use or function of a drug, biological product or device or defend against unfavorable effects of those products. All the products qualifying for these protections require FDA approval, licensing or authorization.

Easily targeted COVID-19 Products

  • Dietary Supplements/Nutraceuticals  This is an unregulated industry that lacks stringent oversight. The supplement industry is notorious for overstating the benefits of their products. Most supplement/nutraceutical companies are smart enough to make sure their labels and instructions do not make claims of preventing, curing or lessening the impact of COVID-19. However, many companies either see an opportunity to increase their revenues or believe their products mitigate COVID-19. They will draw the scrutiny of plaintiff attorneys.
  • Imported Products  In their haste to capitalize and profit on the demand for COVID-19 related products, many importers were desperate to get products. Since time was of the essence, many simply did not do their due diligence on the products they purchased and distributed into the U.S. marketplace. N95 face masks are an excellent example. These face masks offer the best protection and command premium pricing. Unfortunately, some importers purchased forgeries from foreign suppliers. Those did not have the protection offered by certified N95 masks.
  • COVID-19-Related Products Not Authorized by the FDA under the PREP or CARE Acts.  Attorneys and law firms are in the process of trying to cash in on the pandemic, already filing lawsuits and advertising to users of COVID-19-related products. As stated above, due to the quantity of COVID-19-related products, attorneys are not very concerned about the merits of the case. They look at the number of defendants they can name in a product liability lawsuit. Naming 10 defendants in the lawsuit and getting an average $5K per settlement is a profitable use of their time. And they will continue to pursue COVID-19 related products. Claims can be brought by individuals, companies or in class action lawsuits by groups, such as employees, health care workers and consumers.

What can you do?

Importers, manufacturers and distributors of COVID-19 related products, should establish quality control. Examples include random testing and record keeping of the products you distribute. This establishes that products meet the standards of other similar products in the marketplace and FDA requirements. Next, review the labels, instructions and warnings. Make sure your products’ instructions are clear on the use and make no claims that cannot be scientifically proven. Another step is to check the Good Samaritan laws in your state.  Determine if there are any additional protections available. Also, some states have “innocent seller” statutes that may provide protections.

The role of Product Liability Insurance

At Sadler Insurance, we specialize in insuring manufacturers and distributors of COVID-19 related products. Product defect lawsuits can be covered by a General Liability policy including product liability. In addition, we offer Product Recall insurance. In order to get a quote from the eight leading insurance carriers, please complete this form.

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