Entrepreneurs can plan for a rise in cost of materials. They can plan for marketing. They can plan for expanding. They can even put together a succession plan. One situation that no business can prepare for is a lawsuit. No matter what market your business is in, you are connected to any number of individuals or entities.
Even if you only supply a product to one distributing entity, you still have more connections than you probably realize. There are connections to those entities that supply your small business with the materials to manufacture your product, then after you sell your product to that one entity, they sell it to third parties or put it in another product which then goes on to third parties. Those are all entities and individuals that can bring a lawsuit against your business.
The Kalamazoo, Michigan-based medical device maker, Stryker, is now facing a number of lawsuits over faulty hip replacement devises. Stryker recently voluntarily recalled the model of the device that was causing the problems. These lawsuits are appearing in numerous states because of how widely Stryker products are distributed. And while the total amount of damages being claimed by each individual is unknown to the public there is one suit that has been filed in federal court claiming damages in excess of $75,000.00.
Stryker likely has insurance to protect itself from these types of lawsuits. It is also a large corporation so it is unlikely that even without insurance that these lawsuits would cause Stryker to shut down operations. Small and family owned businesses don’t generally have such luxuries. There might be small insurance plans but they do not cover every possible lawsuit. These businesses are also not as stable as Stryker and cannot take the financial impact of a lawsuit. The situation does show how a business can be exposed to potential liability to people it does not even know about. Stryker did not sell these medical devices to these people. Doctors and medical facilities purchased the replacement hips and then put them in place.
It is possible to protect your business though. While there is no way to guarantee that there will never be a lawsuit that creeps up on you, you can take steps to ensure that you protect your business as much as possible. This can involve the way contracts are drafted, warnings that are given, and disclaiming warranties. It is impossible to control everything, an experienced business attorney can help advise you how to control as much as possible. With all of the potential hurdles for your small business faces, you should not let unknowns get in your way too.
Source: “Report: Lawsuits over hip implants filed against Stryker in Texas, New Jersey” by Yvonne Zipp of MLive.com