Good Morning...I own a small company that sells chiropractic tables. I do not own the mfg. facility, pay salaries, buy parts, etc. All I do is purchase tables from a friend who also builds chiro. tables, and he puts my stickers on them, changes the upholstery style a bit, etc. There are no actual mechanical changes to the table. I advertise and sell them under my companies name, even though other dealers sell the exact same table (less the visual changes, stickers, etc).
Since my friend is carrying products liability, is it necessary for me to do so as well? This seems like double coverage. Of course my insurance agent says I have to have it.
Thank you for your time.
If a "consumer" is injured because a product is defective, they will sue the manufacturer and every seller in the chain from original manufacturer to final retailer. The cost of litigation alone can put many small businesses out of business.
The answer above is only a general statement of the law and not intended as legal advice. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific legal advice. It is not meant to create an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely upon advertisements.
No doubt you a full and complete contract with your "friend" such that in the event your company is ever sued on a product liability claim related to said friend's product that that his company will fully indemnify and hold your company harmless, including the assuming of the defense of the lawsuit and the paying of all attorney's fees and expenses. Even if you have properly protected your company via contract as outlined above, is your company named as an additionally named insured on your friend's policy? If not, who is going to pay the tens of thousands of dollars in legal fees to defend your company between the time of suit and the point when friend's carrier finally gets around to agreeing to take over the defense? Can you afford to front $50,000 in product liability defense costs while you wait for his carrier to accept the defense? How comfortable are you entrusting your company's entire future to said friend? If friend fails to maintain such coverage, or perhaps through some inadvertent clerk error has a lapse of coverage are you willing to put literally everything on the line?
If it is true that you are not engaged in the design or manufacture of the product in anyway then the underwriting of the coverage should reflect it.
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In a word, "yes." Whether or not you are actually changing the tables, you will be sued if something goes wrong with them before anyone else, thanks to those stickers. Litigation can be extremely expensive. Make sure your company is protected. You friend's insurance company will likely look for whatever way it can to avoid coverage and put the burden back on you. You want to make sure you have someone on your side doing the same thing.
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