Expert: Charles W. Field - 3/8/2004

Question
I am considering selling new and vintage jewelry on Ebay.  I am worried that, for example, a person buys a necklace, and after a month it breaks and a child swallows a bead, etc.  How exposed am I to a product liability lawsuit? If I put a product liability disclaimer in my Ebay listing how much protection would that offer?
Should I get insurance to be on the safe side?


Answer
Given that McDonald's is getting sued for making people fat, I wouldn't be surprised if you get sued if some even remotely possible bad thing happens. I don't know what kind of disclaimer would protect you. By all means I would advise getting insurance. Make sure you also get coverage for defense costs (i.e., to pay the lawyer, even if the case has no merit and gets thrown out). You may have to shop around, since your local insurance agent probably won't know anything about this type of insurance. Also, make sure that they spend the time to go over the fine print to make sure all the things you are concerned about are covered. Make them show you the language. For all the "good hands", etc. ads, when a claim is made, the first thing insurance companies ask themselves is "How can we get out of paying this claim?"