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Path: Sourcing News & Advice
>> Import from
China Advice >> Can my China supplier's
liability insurance cover me if there is a recall in USA?

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

Posted: October 10, 2014

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:

Arrange your own US based coverage. Perhaps you can pass on this cost to
the seller if you have buying power.

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.

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 http://www.sourcinginfo.org/ and do a
keyword search or start with this video: Video
4: Project Management and Quality Control

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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