Are Guides legally liable in case of product defects?

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There are two general legal theories under which a products liability claim will be brought:  Manufacturer’s/Design Defect, and Breach of Warranty.

Well & Company's corporate products liability insurance policy extends coverage to distributors for Manufacturer’s/Design Defect, although it will not cover claims based on a distributor’s improper claims about the products.

Well & Company has a very strict policy regarding what claims can be made about our products.  In specific, the Policies & Procedures guide states that:

"No claims (which include personal testimonials) as to therapeutic, curative or beneficial properties of any products offered by Well & Company may be made except those contained in official Well & Company literature. In particular, no Guide may make any claim that Well & Company products are useful in the cure, treatment, diagnosis, mitigation or prevention of any diseases. Such statements can be perceived as medical or drug claims, and they may lack adequate substantiation. Not only are such claims in violation of the Guide Agreement, they also violate the laws and regulations of the United States, Canada, and other countries."

For a more detailed explanation of the reasons behind this very important policy, please review a great article on the subject here:  You’ll Pay Millions in Fines if You Violate These Rules

Liability for a manufacturer’s/design defect will be with the company and/or the manufacturer.  This could result from a batch that was manufactured incorrectly or a design defect—the product as formulated is harmful.  Although a distributor (Guide) may be named in a lawsuit arising from a manufacturer’s or design defect, there likely would be no liability for the Guide.

Liability for a Breach of Warranty claim may be with the distributor (Guide) if it is the distributor that made the warranty.  For example, a distributor, in an effort to sell a product, states that the product is safe for a particular population of people when in fact it is not.  A member of that population takes the product and becomes ill or dies.  There is a potential product liability claim against the distributor (and possibly the company).

 

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