Taking your business global can be one of the best decisions you make; it opens you up to a new customer base and can give your company an advantage that cannot be found in any other way. Unfortunately, businesses also have to deal with the issue of product liability when going global. The good news is that, with some foresight, your global expansion liabilities may be prevented.
Understand your Manufacturing
The first thing you need to understand about product liability when going global is the importance of your manufacturing or sourcing procedures. If you have not already done so, you need to delve deeply into the way your products are delivered or made, including aspects such as what kind of people are working for you, where your facilities are, and what goes into your products. Knowing this information will prepare you for the step of dealing with product liability when going global, which pertains more to the regulations and rules in place in the country you wish to expand into.
Learn Regulations in Your New Market
The way that companies are governed in different countries varies tremendously. What may be acceptable in your home country could be completely outlawed in another location. We constantly see examples of this in different industries. For instance, consider the recent controversy over Fireball, a cinnamon whiskey-style liqueur drink that is popular in many different places. Fireball was recalled in three countries because its propylene glycol content was higher than legally allowed in these European countries. In the United States, however, the drink’s propylene glycol content was considered acceptable by the Food and Drug Administration.
Differences like these can deal a severe blow to your efforts to globalize, which is why it is so important that you get a strong understanding of the regulations in the market you wish to expand into. Check out government websites, and research guidelines relating to the sale, production, and distribution of the kinds of things that you plan to offer.
One important aspect of product liability, when going global, is obtaining enough insurance coverage. You must be familiar with the way that the insurance industry works in your target country and if they exist, the minimum requirements. To make this part of going global easier, you may want to look into global insurance policies that cover your operation no matter where it is; however, you also need to make sure that these types of policies are acceptable as proof of insurance for the foreign governments you are going to be dealing in your global locations.
Product liability when going global is of paramount importance. If you neglect this aspect of globalization, one small mistake or error could cost you weeks or even months of time dedicated to expanding into new countries. Spend time educating yourself on liability regulations in the market, and it will be much easier for you to successfully navigate the challenge of minimizing your risk as you take your operation global.