Product liability
As a manufacturer, importer or seller, you bear significant responsibility for the safety of the products you place on the market. If a defective product causes personal injury or damage to property, product liability may arise.
What does product liability cover?
Product liability means that, as a manufacturer, importer or supplier, you may be liable for damage caused by a defect in your product. A product is defective if it does not provide the level of safety that a person is entitled to expect. The starting point for this assessment is what a reasonable user (the average consumer) may expect when using the product normally. This includes not only physical damage, but also personal injury or damage to other property.
Liability of manufacturers, sellers and importers
Liability for a product rests primarily with the manufacturer. However, an importer, distributor or even a seller may also be liable in certain circumstances. This so-called 'seller's product liability' is relevant, for example, where the manufacturer cannot be identified or is established outside the EU. In that case, the consumer may pursue any supplier. If the supplier subsequently identifies the manufacturer or its own supplier, it is released from further liability.
If several manufacturers are liable for the damage, each of them is liable for the whole. The injured consumer may therefore hold them jointly and severally liable. In the business-to-business market (B2B product liability), additional contractual arrangements may also apply, provided that they do not conflict with mandatory provisions of the Dutch Civil Code.
Who bears the burden of proof in product liability cases?
Where damage is caused by a defective product, the burden of proof in principle rests with the injured party. The injured party must establish that the product was defective, that damage was suffered and that there is a causal link between the defect and the damage. As a manufacturer or seller, it is therefore very important to document carefully how the product was developed or manufactured, which quality controls were carried out and what information was provided to the customer. In any subsequent proceedings, this documentation may be decisive in rebutting liability or demonstrating that you acted properly.
WHEN IS A MANUFACTURER NOT LIABLE?
A manufacturer is not always liable under the statutory product liability rules.
- For example, there is no liability where the product was safe when it was placed on the market but became unsafe later, or where it was technically impossible to discover the defect at that time.
- The manufacturer is also not liable if the product was not manufactured for commercial purposes, if the manufacturer did not itself place it on the market, if it was manufactured outside the course of its business, or if the defect resulted from mandatory public-authority requirements.
- Finally, the manufacturer may rely on an exclusion of liability where the defect arose in a component incorporated into a finished product.
Product Liability Directive and new legislation
The current rules are laid down in the European Product Liability Directive, which forms the basis for national legislation in the EU Member States. A new Product Liability Directive entered into force in 2024 and extends the product liability regime to include, among other things, digital products, software and AI. This means that businesses supplying technology products should prepare in good time for changing requirements. Member States must transpose the Directive into national law by 9 December 2026; from that date, it will apply to products placed on the market on or after that date.
Protecting against risk: product liability insurance
The financial consequences of product liability can be significant. Many businesses therefore take out product liability insurance. In many cases, this insurance covers claims for damage caused by defective products. However, cover is not always complete or automatic. It is therefore important to understand exactly which types of damage or liability are covered by the policy. It also remains important to have a clear understanding of your legal position: insurance is no substitute for careful risk management and proper documentation.
HOW CAN OUR CORPORATE LAWYERS ASSIST YOU?
Whether you are a manufacturer, supplier or seller, you need to know when you may be held liable for damage caused by a defective product. The law is clear on the main principles, but its application in practice is often complex. Who is responsible for a defective product, what information must be provided, and how can liability arising from a product recall or damages claim be avoided? It is therefore important to understand which rules apply, which documentation and quality controls matter, and how a business can prepare for potential risks. That starts with understanding your position and, where necessary, obtaining legal advice.
Frequently asked questions
Can a manufacturer exclude product liability?
No. In relation to consumers, product liability is governed by mandatory law and cannot therefore be excluded. In B2B relationships, limited contractual departures may be possible, but a complete exclusion is generally not legally valid in practice. Liability may, for example, be limited to a maximum amount of damages or to direct loss only, but the parties may not depart from provisions of mandatory law that require or prohibit otherwise.
What is the limitation period for product liability claims?
A product liability claim becomes time-barred three years after the injured party becomes aware of the damage, the defect and the party liable. In addition, an absolute long-stop period of ten years applies from the date on which the product was placed on the market. After that period, a claim can no longer be brought.
When is a manufacturer liable for consequential loss?
Product liability also covers consequential loss: loss arising because a defective product damages other property or causes personal injury. For example, a defective appliance may cause a fire that also damages other property. Damage to the defective product itself is not covered by this regime, however; contractual liability or a warranty may apply instead.
When is a manufacturer liable for personal injury?
If a defective product causes bodily injury, for example burns caused by an exploding appliance, the manufacturer may be liable under product liability rules. The injured party may then claim compensation for medical expenses, loss of income and non-pecuniary damage (compensation for pain and suffering).
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