Retail Distribution & Wholesale Risk Management

MFGunderstands the unique demands and exposures for Retail, Wholesale and Distributor operations. Our service platform for this diverse industry tailors a program designed to fit your unique needs. For your risk transfer resource, contact a MFG risk consultant for more information about developing or enhancing your risk management program.

MFG Insights

    Product recalls can be devastating not only for a manufacturer, but also for its wholesaler-distributors. Wholesaler-distributors are subject to scores of laws and regulations related to product liability, which can vary from state to state and over time. Risks include bodily injury and property damage losses arising from the product, its packaging, its instructions for use, labels, warnings and any other on-product messages. While the manufacturer is usually held liable for injury resulting from a defective product, any seller of the product can also be held responsible in the United States under tort liability. Certain circumstances heighten a wholesaler-distributor’s risk:

    • When it provides installation, service or repair work for the product.
    • When it modifies, repackages or re-labels products, instructions or warranties.
    • When it uses its own private label.
    • When it imports products from a foreign manufacturer that do not carry U.S. product liability.
    • When it works with thinly capitalized or poorly insured manufacturers.
    • When it had knowledge of the defective condition prior to the sale and did not take action.
    • When it recommends a product that is unsuitable for a given purpose.

    In addition, an injured consumer can file a suit against a wholesaler-distributor instead of a product manufacturer even if the wholesaler-distributor did not create the defect, participate in the design or production of the product, or author the product instructions or warnings. While the wholesaler-distributor can bring the manufacturer of the defective product into the case as a defendant, claiming indemnity, this is not always successful, especially if a foreign manufacturer produced the product.

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