On 05/06/2016 07:05 AM, Oscilloclock wrote: > John, that's truly a great write-up, if not very scary.
Yeah. If we spent any time in a civil court room we'd probably be afraid to leave our houses. My attitude is "damn the torpedos, full speed ahead" with some mitigation strategies. > > Regarding your liability insurance: Do they demand to see your > product, go through its design documentation, or at least see testing > evidence before offering the policy? Or if they do cover you with no > questions asked, is there risk that they won't cover you in the end > if they also believe you sold a defective product? The $5M blanket insurance policy that I have is a PERSONAL liability rider and not a product liability one. Product liability is a whole 'nuther ball of wax. My agent has told me that for our Roy products at our anticipated sales volume for next year AND if we got agency listing, the premium would be in the $30k/yr range. He also said to forget getting it on a non-listed product. The insurance companies rely on the listing companies to tear the product down, analyze it for safety and destroy one or two. So. I've talked to ETL about having Roy listed. The current model will not pass because I did not observe sufficient clearance rules for high voltage but I'm redesigning it for listing testing. The ETL guy quoted me $11.5k and 3 units for the testing process. Two units would be tested to destruction. Then there's the annual renewal fee. My memory is fogged there but I believe the quote was $2.5k. But that's not all. If I make ANY change to the listed unit, it has to be evaluated again. Depending on the change, probably not a full blown listing test but some sort of exam. I asked him whether, for example, changing the case screws from Phillips head to hex head screws would trigger the re-exam. The answer was yes. Then there's the 4 times a year random factory audit. I don't recall the price on that (my head was kinda spinning at that point). but it was over a couple of kilobucks. So to fully protect Tnduction from any liability from Roy, I'd spend over $50k the first year and several $k each year following. Now you know why people set up shell, valuless companies, have a product manufactured in China, sell 'em quickly and shut down. After my investigation, we had a board meeting and decided to "run bare". That is, no insurance but also no assets to ward off product liability attorneys. Our products are made by a contract manufacturer (AKA "box builder"). All the equipment and furnishing are leased. Again there, there has to be a diversity of sales or the court can rule it a sham to get out of liability. I got a fried who already leases equipment to take ownership of our equipment and then lease it back to us. The lease has to be at "fair market value" or else it can be ruled a sham. All the intellectual property is owned by one of the three core owners and is licensed to the company. I have a few other things we do but they rest on novel legal theory so I'm not going to discuss them. > > And have you or anyone heard of anyone in the US prosecute a kit (or > whole clock) maker outside the US? Not outside the US but yes, several here. One stands out. The Storz Medical company manufactured what everyone regarded as the best resectiscope (an instrument inserted into Mr Happy [uncross your legs now] and has a little loop connected to coax cable that is used to burn off bladder cysts. There was another company that made the best borescopes. So Storz got this brilliant idea to mate their rescectiscope to this borescope using an adapter. They did this by hiring a home shop machinist with little more instruction than to make the two fit together and make the connection waterproof. Then when the company received the adapters, they started selling them with no outside testing. This guy, having no medical manufacturing background, made the adapter out of aluminum instead of surgical steel and used 1 O-ring on each end for the seal. A urologists in Cleveland, TN bought one of the setups. he had the patient jacked almost to the ceiling and was looking almost straight up to get at a polyp on the upper wall. Connected to the instrument was an "electrosurg" or electronic surgical unit. Basically a hopped up wart burner. About 500 watts max output. The doc was concentrating so hard on the task at hand that he hadn't realized that the adapter was leaking irrigation fluid and the fluid had puddled in his eye socket. When he stepped on the pedal to cut, the RF flowed down the stream of fluid and into his eye. Skin effect let the current flow around his eyeball until it came to the optic nerve. It severed the nerve, instantly blinding the doc in that eye and ending his career. That was the only case I ever work for the plaintiffs because Storz's actions were so reckless. To make a long story short, we cleaned their clocks. About a $50M verdict, upheld on appeal. We cleaned out their US branch, cleaned out the machinist, got some money from the aluminum supplier (I didn't agree with that part) and several other sources. Before I stop, I want to recommend a book http://www.amazon.com/Every-Engineer-Should-Product-Liability/dp/0824768760/ref=sr_1_4?s=books&ie=UTF8&qid=1462646169&sr=1-4&keywords=product+liability+in+manufacturing "What every Engineer Should Know about Product Liability". We were given this book in the product liability classes I mentioned before. This first edition is probably about 30 years old so find a more current edition. Before you give up and quit making things, remember that your product does not have to be perfect. It just has to pass the "reasonable man" test. John -- John DeArmond Tellico Plains, Occupied TN http://www.tnduction.com <-- THE source for induction heaters http://www.neon-john.com <-- email from here http://www.johndearmond.com <-- Best damned Blog on the net https://www.etsy.com/ca/shop/BarbraJoanOriginals/neu <-- Fine Art Originals PGP key: wwwkeys.pgp.net: BCB68D77 -- You received this message because you are subscribed to the Google Groups "neonixie-l" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send an email to [email protected]. To view this discussion on the web, visit https://groups.google.com/d/msgid/neonixie-l/572E3991.9040702%40neon-john.com. For more options, visit https://groups.google.com/d/optout.
