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What Does Breach of Warranty Mean?

18 Oct 2017 | Under Business Insurance | Posted by | 0 Comments |
Breach of Warranty

Breach of warranty is a confusing term, but it is something that your business may need to be insured against. This is a brief overview of breach of warranty and how it may impact your business.

An Overview of Breach of Warranty

Breach of warranty is a legal concept that may arise in product liability cases. Promises or warranties that are made by either a manufacturer or seller may in turn be used against them in court should those claims turn out to not be true. On the preventative side, this obviously means that manufacturers and sellers should be careful about making promises or warranties that they cannot back up with proof or evidence. However, there are also situations where a product was designed and tested, but fails under real-world usage. In either situation, whether claims were overly optimistic or a product does not perform as expected, the manufacturer or seller may face a breach of warranty claim.

The rules regarding breach of warranty liability vary between states. Many states, for example, require that the defendant and plaintiff in a breach of warranty case are in privity – that is, they are both party to the same contract. In effect, this requirement may protect manufacturers who do not sell directly to consumers. Consumers will also generally need to demonstrate that they suffered damages as a result of the breach of warranty.

Unexpected Liability Claims

Breach of warranty insurance may help to protect your business in the case of an unexpected product liability claim. Considering the cost of litigation and the potential for judgments that would force a business into bankruptcy, breach of warranty insurance may be something that your business cannot afford to be without.

Finding breach of warranty insurance may not be easy for businesses that involve firearms or ammunition. At Associated Services in Insurance, we specialize in serving the firearms and ammunition industry. Contact us today at 816-229-4450 to learn how we can help your business find breach of warranty insurance.