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    Who’s Liable for Pet Food Contamination – The Risk of Product Liability

    China the source of the problem

    Pet food contamination has been traced to Chinese suppliers. Wheat gluten purchased from company in Xuzhou, China, north of Shanghai, contained the hazardous material, and other Chinese companies are now implicated.

    Food product sellers have a special product liability exposure which is highlighted by this incident. This applies to all players in the supply chain from farmers to manufacturers to retailers. Liability arising from death or injury can be substantial, and with products in general, and food products in particular, there is the likelihood that the defective product will affect large numbers of victims, resulting in multiple claims.

    With respect to components (or ingredients) purchased from suppliers outside the US, there are the further problems of uncertainty re quality control, and possibly lack of recourse against the supplier. Some foreign suppliers may not have substantial assets or may not carry any or enough product liability insurance (this of course could also be the case with a US supplier). Furthermore, distance and difference in legal systems could prevent recovery. Plaintiffs who cannot reach the ultimate culprit will go after the US company. These same recovery problems would apply to your insurer as it tries to subrogate after paying your claims.

    Risk Management

    Consider the following in managing your product liability risk:

    Apr 25, 2007

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