Most small business owners know that having the right insurance coverage for their various and specific needs is crucial to the successful operation of their company. However, many also end up learning the hard way that the policies they’ve had for years may not be adequate to the needs that have evolved over time. As such, a careful and regular review of company insurance policies can go a long way for any companies hoping to continue on their paths to success.
This may be particularly true when it comes to manufacturers, because as they develop new products their insurance needs could potentially change thanks to shifting liabilities and the like. For instance, if a new product developed by a small manufacturer poses a potential choking hazard, and needs to be recalled, that could create logistical issues with respect to insurance that owners might not be able to foresee without a regular review of their needs.
A recent example
Just such an example recently cropped up for Britax, an England-based manufacturer of children’s products, according to a report from Transport Canada. As such, the government agency issued a recall of some of the company’s infant car seat models, because a manufacturing problem seems to have created a problem with the seats’ carrying handles. So far, the company has received nearly 75 reports of the handle cracking, fracturing, or even outright breaking while being used.
The affected car seats include at least those made between Oct. 1, 2014 and July 1, 2015, the report said. It is believed that close to 3,700 of these seats are in use across Canada, and pose a significant risk of injury to babies. One infant suffered a bump to the head after landing on the ground, among these cases, though that was in the U.S. and not Canada. However, this only relates to normal use when the seat is being carried, not when it is fastened in a car as normal.
Those who have registered their car seats with Britax can expect a replacement kit in the near future, the report said. Those who have yet to register can either do so online or simply contact Britax to get a kit sent to them as well, and they should arrive within two weeks.
What’s the lesson here?
Companies large and small can be impacted by these types of issues, because they are sometimes unavoidable in the course of doing business. As such, having the right kind of insurance coverage in place will go a long way for any company, and owners who are diligent about reviewing their needs on an ongoing basis will also have the best idea of how to address any situations that might arise. That, in turn, will help to ensure that the company is on a sound footing as it moves forward, and that there will be a greatly diminished chance that unexpected bad news ends up impacting their bottom lines.
“Product recall does not only affect the large manufacturing companies that produce large quantities of a single product or multiple products. With the internet, small companies are able to reach customers nationally and worldwide and thus their product can reach a wider audience,” said Kent Pitkin, National Director Commercial Lines at APRIL Canada. “With the risk of a product liability and the chance of recall due to a product issue, the amount of insurance needs to be reviewed to ensure that not only the proper coverage is available, but the limits are adequate enough to cover the wide geographical exposure.”