When consumers are hurt or killed as a result of a problem with a product, they have legal rights under product liability law that governs these situations and dictates when and how victims can make a case for compensation.

Today, there are many well-known examples of product liability cases, from the hot coffee case against McDonald's, said to be the most debated product liability case in American history, to the case against tobacco giant Philip Morris that resulted in the payment of $28 billion in punitive damages to lung cancer sufferer Betty Bullock of Missouri in 2002.

“Over the last 10 to 15 years there has been an explosion in product liability cases," says Gary Grindle, executive vice president, Amwins Brokerage. “I think a lot of it has to do with social inflation where people are now just looking for someone with a deep pocket to pay when somebody's injured irrespective of clear negligence."

Since 2018, there have been numerous product liability cases that have resulted in the payment of billions of dollars to claimants. Some recent cases include the claim against Monsanto and Bayer in relation to the popular weed killer, Roundup, which contains cancer-causing glyphosate; Johnson & Johnson's talc products which allegedly contain traces of toxic asbestos; and the Hoffmann-LaRoche's acne drug Accutane, which failed to warn of possible gastrointestinal side-effects.

More recently, in November 2023, a federal judge allowed the majority of claims to move forward in litigation that asserts chemical hair relaxer products made by L'Oreal USA, Revlon and others allegedly cause cancer and other injuries.

These are just some of the high-profile, wide-ranging product liability lawsuits that are currently making headlines because of the impact they have had on plaintiffs' lives and the monetary amounts involved. 

“These types of claims have changed the market by showing that every party in the supply chain needs to be aware of the inherent risk of a product or process as well as risks assumed contractually," says Amy Gilmore, vice president, casualty underwriting performance for excess & surplus/specialty and commercial lines, Nationwide. “It is important to understand the reach of the product, distribution, longevity of product in the market, and potential hazard to ensure each party in the supply chain is covered adequately." 

This is evident in the recent L'Oreal USA, Revlon filing where several smaller cosmetics companies, including some based in India, are named in the lawsuits.

In the product recall world, “the Tylenol incident was essentially the seminal industry event," says Scott Crump, assistant vice president, manufacturing and mercantile strategic business units, Selective Insurance. “While it wasn't the largest in history, it's still one of the largest from a dollar standpoint."

In September 1982, Johnson & Johnson made a voluntary recall of its best-selling product, Extra-Strength Tylenol, when seven people died from taking Tylenol that was laced with cyanide. The incident cost the company between $100 and $150 million.

“There are several things to consider when ensuring adequate product liability protection for clients," says Peter Burns, head of large and complex casualty solutions, The Hartford. Here are four things to remember:

1) Understand the risks your clients face. “By understanding your client's product list and where they are manufactured, you can be prepared to defend against strict product liability and negligence, including design defects, manufacturing defects, marketing defects and improper warnings," Burns says. “Businesses that import products may bear sole responsibility and be held accountable for safety requirements, industry or government standards, proper safety warnings and labels. Understanding the legal theories of liability can help your client know the risks they face." 

2) Review contracts clients have in place. An agent should “be aware of contractual requirements and ensure appropriate hold harmless agreements are in place so that suppliers and partners are responsible for their own negligence in the case of a claim," Burns says. 

3) Offer risk mitigation options. “Help clients document retention and a written product safety program that reflects legal requirements and creates a story of the development of the product to show evidence that a business took sufficient measures to make a product safe," Burns explains. 

4) Communicate what is coming down the pike. In 2024, “some product liability cases that we foresee coming down the pike include 'forever chemicals,' such as perfluoroalkyl or polyfluoroalkyl substances (PFAS); societal product claims, including social media, obesity, environmental impacts, infant formula, gun manufacturers and retail sellers; and COVID-19 vaccination efficacy," says Terry Bolin, vice president, casualty claims for excess & surplus/specialty and commercial lines, Nationwide.

While product liability claims have primarily been related to tangible products, litigation has recently been brought in California against Meta Platforms Inc's Instagram and Facebook, ByteDance Ltd's TikTok and other social media platforms alleging that these sites set out to hook young users, leading to addiction and poor mental health outcomes, including eating disorders, self-harm, depression and suicidal thoughts.

“Communicating emerging issues so that insureds know what to expect and why is important," Burns adds. “As well as helping them understand how quality control measures are critical to product accounts and help protect them." 

Olivia Overman is IA content editor.