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Can my China supplier’s liability insurance cover me if there is a recall in USA?

by Mike Bellamy

How do suppliers in China supply liability insurance to cover the buyer in case of a recall? Please advise what options are available?

Unfortunately, it is very rare for a Chinese supplier to have coverage for liability in the USA for example. I see from your website that you have various products aimed at children which are under your brand and your design.

It’s hard for a Chinese company to get overseas coverage in the first place, let alone for a product they manufacture but didn’t design or brand.

Even if the factory finds a way to get liability insurance, if God forbid a child in the US gets hurt on your product or there is a recall situation, the US lawyers aren’t going after an overseas supplier. They will come knocking on your door as you are the importer of record and it is your responsibility to ensure the product is safe and compliant with US standards. And it will be another fight all together for you to deal with the factory and their insurer to try to get compensation out of them.

Without knowing the details of your specific case, but based on my experience importing toys and medical product, I would advise the following:

  1. Arrange your own US based coverage. Perhaps you can pass on this cost to the seller if you have buying power.
  2. Make sure the designs are fully compliant and you don’t have a safety issue. The major labs can do the testing and give you piece of mind.
  3. It’s not enough to complete the lab testing and product certs, you also need to make sure actual production matches the sample which pasted the safety tests. So ongoing production inspection is essential. If you need some pointers on QC just visit my blog at www.SourcingInfo.org and do a keyword search or start with this video: Video 4: Project Management and Quality Control

don’t count on your supplier to have you covered

 

 

Here is an article I wrote about compliance for your reference: Product Certification and Compliance: The Key Steps.

 

 

 

 

Let me know how things work out for you. Hope the feedback above helps.


Question answered by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.

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