Protecting yourself from legal liability

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Monday, September 30, 2002

"Firestone and Ford Recall Over 14 Million Tires With Safety Defect." "Century Products Recalls Car Seats Due To Defective Seat Restraints." "Phen Fen Drug Maker Settles Class Action Law Suit For $3.75 Billion."

In addition to these headlines in the news across the country regarding product liability lawsuits from the not-so-distant past, you also may have recently read in the news about Invacare's own recall of power wheechairs, which was initiated in April 2000. Subsequently, three lawsuits on behalf of consumers were filed against Invacare, which the company ultimately settled.

None of us - manufacturers or providers - are immune from lawsuits regarding product liability. Product liability is the phrase used to describe situations in which a person or property is injured or damaged in some way due to a defective product or service. We have become a litigious society and plaintiffs' attorneys are now the most powerful lobbying group in our nation's capitol.

In addition to the manufacturer's liability, the supplier or provider of the product or service also may be held liable for injury or damage caused by a product or service. How can you, as an HME provider, protect yourself and your business?

The following are some questions you should ask yourself before selecting products and manufacturers or distributors with which you do business:

- Does the company manufacture its products to both ANSI (American National Standards Institute) and RESNA (Rehabilitation Engineering and Assistive Technology Society of North America) standards? These voluntary standards help ensure product quality and uniformity.

- Where is the product manufactured? Offshore? Is the product manufactured in an ISO 9000 certified manufacturing facility? ISO, which stands for the International Organization for Standardization, is a worldwide federation of national standards bodies, of which ANSI is a member. ISO's mission is to promote the development of international standardization and related activities.

- Does the company test its products extensively to determine their reliability, quality and safety? Rigorous testing by the manufacturer ensures overall design and product quality and backs up the manufacturer's warranty claims.

- What are the company's warranties for the product? Do they cover the product's reasonable lifespan?

- Does the company promptly conduct recalls in accordance with FDA requirements? Does the company go above and beyond the FDA's minimum requirements for a recall? In the case of Invacare's power chair recall, the company has far exceeded the FDA's guideline of sending three mailings notifying providers by sending a total of nine mailings thus far.

- Does the manufacturer offer sufficient product liability insurance coverage - a certificate of insurance - and does this coverage extend to you as a provider? Is the coverage offered at such a level that you and your business will be protected? When you select a product on behalf of your customers, you must be certain that it is manufactured by a company with the resources to stand behind the product should a liability issue arise, since lawsuits with or without merit are a common occurrence these days.

- In addition to requiring proof of insurance coverage, does this coverage become null-and-void if other manufacturer's parts or components are interchanged with the product?

Make sure you are making wise choices when determining your product purchase decisions, and ask yourself, "Who stands behind the home health care products you provide to your clients?" Are you standing alone, or do you have the resources of a reputable manufacturer to back you up, if necessary, with regard to product liability issues?

If you haven't given great consideration to these questions, you certainly ought to.

A. Malachi Mixon, III is chairman and CEO of Invacare Corporation.

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