Achtung, Maybe

There are some ridiculous warning labels out there, but sometimes you need a warning label to defend your company in court.

These days, a consumer who gets hurt while using a product is likely to consult a lawyer about suing the manufacturer, distributor, dealer or rental firm. Lawsuits make one of three basic claims: The design was defective, the product was manufactured incorrectly or there should have been a warning label.

In warning label cases, courts tend to ask whether or not the type of accident was foreseeable. But courts recognize that people do amazingly stupid things, and it's impossible to foresee them all. If you can imagine a scenario in which jurors would say "They should have known people would try that," it may be time to attach a warning--if possible, right on the product itself.

Stay informed about injuries to people using your product or similar ones. Check your competitors' products for warnings they include, give customers contact information so they can inform you of any concerns, and periodically review safety warnings to make sure they're adequate.

Your duty to warn consumers lasts as long as the product does. If possible, set up a system for keeping track of who your customers are so you can send a warning or a recall notice if problems arise.

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This article was originally published in the April 2007 print edition of Entrepreneur with the headline: Achtung, Maybe.