I am a business student and have a question about liability for a product.
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I am a business student and have a question about liability for a product.
Wanda sell gourmet dog treats, what kind of legal exposure does she have and how can she protect herself from lawsuits if her treats make dogs sick?
Asked on June 12, 2017 under Business Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If a dog is sickened or killed by someone's contaminated dog treats, he or she could be liable for the cost of the dog's medical treatment (i.e. vet bills) and/or for the economic value (basically cost) of the dog.
To protect yourself:
1) Form an LLC and have the business conducted under the LLC: this will insulate personal assets and income (including your personal bank account[s], you car, your real estate) from most business-related liability, such as for sickened, etc. dogs. Be sure to respect the LLC structure and separation from you; e.g. keep its accounts and money separate from yours. With an LLC, only the money, assets, etc. of the LLC, not the owner's assets, should be at risk.
2) Get appropriate liability and umbrella insurance to protect the LLC and its assets. A reputable agent can guide you in what to purchase.
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