Global Products. Local Lawsuits.
How to build product liability cover that survives global supply chains—and global claims.
Globalisation makes products faster, cheaper, and riskier.
From offshore manufacturing to international e-commerce, product liability is no longer just a local concern.
Here’s how cross-border exposures actually unfold, how product laws differ around the world, and what to look for in a truly international product liability cover.
🧭 Where Liability Actually Lands
When your offshore supplier gets sloppy with quality control.
They cut corners. You don’t find out until someone’s injured—or worse, a regulator finds out first. If you’re the importer or brand owner, liability often stops with you, not them.When your packaging doesn’t meet local compliance standards.
Think missing warning labels, incorrect language, or the wrong certification mark. What passes in Sydney might get flagged—or fined—in Singapore or Frankfurt.When a distributor tweaks your instructions and you wear the lawsuit.
Your safety guidance said one thing. Their translation said another. When the product fails, guess who gets named in the claim?When a consumer gets injured in a country you barely operate in.
You didn’t market there. You didn’t ship there directly. But thanks to grey imports, marketplaces, or cross-border logistics—you’re still on the hook.
📍 And somehow, you’re the one in court.
Welcome to global supply chain liability, where responsibility flows faster than your insurance program can keep up—unless it’s been built for it.
📚 Product Laws Around the World (Yes, They’re Different)
🦘 Australia:
Under the Australian Consumer Law (ACL), manufacturers, importers, and even suppliers can be strictly liable for products that cause injury, death, or financial loss—even if they weren’t at fault. That includes local businesses who supply goods when the manufacturer can’t be identified or isn’t based in Australia (s138).
There’s also the overlay of mandatory consumer guarantees. Bottom line? If you’re importing it, distributing it, or branding it—you’re probably backing it.
🇪🇺 European Union:
The Product Liability Directive imposes strict liability across all EU member states. In 2023, the General Product Safety Regulation (GPSR) kicked in to modernise those protections—especially around connected, smart, and AI-enabled products. If you're selling IoT devices, wearables, or anything that runs code, you're now facing cyber-physical liability—where bugs, not bolts, cause harm.
🇺🇸 United States:
Welcome to the litigation capital of the world. Product liability can arise from strict liability, negligence, or breach of warranty. Claims often balloon into class actions. And if the jury thinks you cut corners? Punitive damages can wipe out even a well-capitalised company.
🌍 Rule of thumb:
You're not judged by the rules in your home country. You’re judged by the rules where the harm occurs. If you're not aware of local liability regimes, you're not just exposed—you're flying blind.
🛡 Structuring Product Liability Cover for a Global Market
✅ Use a global master policy with local fronting to align compliance and claims handling.
One central policy sets the tone, while locally admitted policies in key regions keep regulators happy and claims manageable. It’s the best of both worlds—uniform cover, local credibility, and fewer nasty surprises when something goes wrong in-market.
📍 Get clear on territorial scope (where damage happens) and jurisdiction (where you can be sued).
These two aren’t the same. A product might injure someone in Canada (territory), but the lawsuit might be filed in California (jurisdiction). If your policy doesn’t explicitly cover both, you might be holding the bag.
🧾 Claims-made vs. occurrence-based: know the difference—especially for long-tail risks.
With claims-made cover, if the claim’s filed after your policy lapses, you're out of luck. Occurrence-based? You're covered as long as the incident happened while the policy was active—even if the claim rolls in years later. Critical if you're in sectors with delayed-onset issues (like medtech or construction).
🔍 Review your policies regularly—your risk profile changes as fast as your suppliers do.
New suppliers, new markets, new materials = new exposures. A product tweak or new distribution channel could quietly create a coverage gap you won’t discover until a claim lands.
🔧 Managing Offshore Production (Without Losing Sleep)
🧠 Due diligence: Vet your suppliers like they’re part of your team.
Don’t just look at price and turnaround time. Investigate their manufacturing controls, incident history, certifications, and yes—their insurance. If they go quiet when you ask, that’s your first red flag.
📜 Contracts: Spell out who owns what risk—and confirm they’re insured.
“Standard” terms won’t cut it in cross-border production. Make sure your contracts cover indemnities, governing law, dispute resolution, and minimum insurance limits. And follow up on those COIs—yearly, not just at onboarding.
🔎 Quality control: Inspect what you expect (yes, even remotely).
Whether it’s hiring local QC auditors, using third-party inspection firms, or leveraging video-based verification, having oversight—however lightweight—can prevent major reputational damage and claims down the line.
🎯 If your brand’s on it, the liability probably is too.
In the eyes of the law (and the customer), the brand is the manufacturer. You might think you're just the middleman, but if you’re the face of the product, you’re probably the fallback when things go wrong.
💼 Best Practices for Risk Transfer
📝 Embed insurance clauses in every supplier agreement.
Don’t just ask if they’re insured—contract it. Make your supplier name you as an additional insured. Specify minimum coverage levels. Outline what types of insurance they must carry (e.g. public & product liability, recall, errors & omissions). And make proof of insurance a deliverable, not a handshake.
📦 Use batch coding and recall plans to limit exposure.
If you can’t trace defective stock by lot number, you’re recalling everything. That’s slow, expensive, and reputationally damaging. Most product liability policies include a recall extension—but the sublimit is often a fraction of what a real recall costs. Build your systems and workflows to contain a problem before it spreads—and double-check whether your cover is anywhere near enough.
🤝 Work with brokers who get global placements and regulatory quirks.
A good broker won’t just give you a product—they’ll map your whole risk footprint. They’ll tell you where local fronting is required, where export exclusions might sneak in, and how to structure your cover so you’re not double-paying (or missing something entirely). If you’re expanding into new jurisdictions, bring them in early—not after the deal is done.
🚧 Don’t just transfer risk—design it out.
Risk transfer is your last line of defence. Your first? Smart product design, localised labelling, controlled supplier changes, and robust QA. Insurance should catch what slips through—not carry what could’ve been prevented.
📉The Exactech Lesson: What Product Recalls Really Cost
In early 2023, Australian patients began receiving letters they didn’t expect: they had been implanted with defective medical devices that could degrade prematurely inside their bodies.
The culprit? U.S. medtech company Exactech, whose knee, hip, and shoulder implants had been improperly packaged—some for years. The issue? A missing layer of protective oxygen barrier film that allowed components to oxidise during storage, making them more likely to fail once implanted.
More than 4,500 Australian patients were affected. Globally? Tens of thousands.
Class actions followed in multiple countries. In Australia, claimants are seeking damages not just from Exactech, but also from local importers and distributors who facilitated the supply. That’s because under the ACL, local entities can be held liable—even if they didn’t manufacture the product.
💥 Key lessons?
Your name doesn’t have to be on the product to be on the lawsuit.
Packaging errors can trigger global recalls—and massive legal fallout.
If you import, distribute, or even brand a product, you need to know how it's made, packed, and stored—and who’s insuring what.
It’s a textbook example of what happens when product liability, cross-border manufacturing, and patchy insurance collide.
🚨 Global Products Need Global Cover
If you're making, moving, or selling products across borders, you’re not just running a business—you’re managing a web of legal obligations, supplier decisions, and unknowns that stretch across time zones and regulatory systems.
And when something goes wrong, the fallout doesn’t stay local.
A packaging fault in the U.S.
A labelling error in France.
A bad batch out of Vietnam.
All of them can end up on your desk—complete with media scrutiny, legal letters, and sleepless nights.
That’s why global product liability cover isn’t just about ticking the “insurance” box. It’s about:
Designing cover that mirrors your real-world operations
Closing the gaps between contracts, compliance, and coverage
Being able to act fast, defend early, and recover financially—anywhere the fallout lands
❌ Don’t assume:
🧠 your policy covers every jurisdiction, product tweak, or distribution channel.
📄 your documentation will hold up under legal pressure in a foreign court.
🤝 your suppliers will have your back when something goes wrong.
Assumptions are the enemy of resilience.
The best product risk strategies don’t just manage what happens after something breaks.
They’re built to recognise where things are most likely to break—and who pays when they do.
👇 Got a cross-border supply story (good, bad, or just plain weird)? Hit reply or leave a comment—I’d love to hear what’s showing up on your radar.
Disclaimer: This post is for general informational purposes only. It does not constitute legal or financial advice. Always consult qualified professionals for guidance tailored to your specific situation.