Product liability is one of the most expensive issues facing businesses manufacturing and selling products. The liability businesses face are negligence, misrepresentation, and strict liability. Most issues fall under the category of defective product, which include defect in manufacturing, defect in design, failure to warn, defect in packaging, and failure to provide adequate instructions.
Quick Takes Video has leased an editing system from Non-Linear Pro, but the system has some liability issues with it. During the video multiple liability issues were found. The first was defect in design when Janet cut her finger on a sharp piece of medal on the drive, which can also be attributed to failure to warn. The second was also defect in design, the software had “ more bugs in it than a run-down apartment”. The third was failure to provide adequate instructions, they read the manuals and were not able to figure out how to make it work. The fourth was misrepresentation of the product with Non-Linear Pro saying that they would be up and running in a day and a half and would be twice as fast (Cheeseman, 2010).
The worst tort violation identified in the product liability video was the misrepresentation tort. Using this tort how could Non-Linear Pro and Quick Takes Video have reduced their business risk utilizing the 7 step process as defined in the Harb article of applying the risk management process to mitigate the business risk associated with the tort of misrepresentation?
The first step or element of successful Enterprise Risk Management is management commitment. For risk management to work properly, management needs to encourage leadership and make sure that everyone owns the risks (Harb, 2008). This means that everyone knows that their actions can affect the end result and be a part of the potential risk of the situation. Management also needs to make sure they are involved with their team and develop a strong commitment to the group. In the video, both...