If the customer is a producer, importer, distributor, supplier, repair or installation contractor and is generally involved in any part of the product life cycle, there is a possibility of being held liable for product quality. Even if it is later found that someone else is to blame, the customer may still incur substantial legal costs in a law suit.
Consumer protection laws in many countries establish absolute liability (without fault) for product quality without much potential for protection. For example, under Article 1095 of the RF Civil Code, damage to a person’s life, health or property, or a legal entity's property due to defects in the design or contents of a product, contractor error, or inaccurate or insufficient information about a product or service must be compensated by the seller or manufacturer of the good, or the person who performed the work or rendered the service, regardless of whether or not he or she is guilty and whether or not the victim was in a contractual relationship with them. Furthermore, any victim of harm caused by a defective product must be compensated, at the option of the injured, by the seller or manufacturer (i.e., anyone who owns the product in the distribution chain).
Even those who maintain good quality control, comply with occupational safety and health standards and use appropriate product quality testing methods can be held liable for damage to the life, health or property of third parties:
Service providers’ liability insurance includes protection of the customer’s property interests in respect of work that is performed or services that are provided by the customer, but can still cause harm to the life, health or property of third parties. This type of insurance is different from general liability insurance, which arises during production or service provision. Therefore, customers who purchase only general liability insurance risk incurring uninsured losses in the event they occur after the entire job is completed or service is provided.
Standard insurance coverage extends to third party liability and legal costs, while optional additional coverage includes product recall insurance and insurance against financial losses.