I used a Print-on-Demand (POD) service to sell hoodies. A batch used a cheap, toxic dye. 50 fans reported chemical burns and rashes. A class-action lawsuit is forming. I thought the POD company was liable, but my name is on the label.
Key Takeaways
- Strict Product Liability: In the US, anyone in the “Chain of Commerce” is liable. That includes the manufacturer, the distributor, and you (the retailer/brand).
- Product Liability Insurance: You need this specific coverage. General Liability covers your operations; Product Liability covers the things you sell.
- Vendor Endorsement: The POD company should add you as an “Additional Insured” on their policy. If they didn’t, you are exposed.
- Recall Costs: Insurance might pay the lawsuits, but “Product Recall” insurance pays to ship the bad hoodies back and destroy them.
The “Why” (The Trap): The “Drop Shipper” Fallacy
You think, “I never touched the hoodies.”
The law says, “You sold them.” To the consumer, you are the manufacturer.
The Trap: Most Creator policies exclude “Products-Completed Operations” (Product Liability). They cover you making videos, not selling clothes.
You need an eCommerce Insurance package.
[IMAGE: Photo of a “Certificate of Insurance” request form sent to a Vendor]
The Investigation: I Called Them
I asked, “My merch burned people.”
1. Next Insurance (eCommerce)
- The Verdict: They offer a tailored eCommerce policy that includes Product Liability. Essential if you have a Shopify store.
2. The POD Service (Printful/Teespring)
- The Reality: Their Terms of Service usually indemnify them, not you. They limit their liability to the cost of the hoodie (
20),notthemedicalbill(20),notthemedicalbill(2,000). You need to demand they add you as Additional Insured (hard for small creators).
3. Assureful (Amazon Seller Insurance)
- The Verdict: specialized for this. They understand the drop-shipping risk.
Comparison Table
| Claim | General Liability | Product Liability |
| Slip & Fall at Office | Covered | No |
| Rash from Hoodie | Excluded | Covered |
| Recall Shipping Costs | No | Yes (if added) |
Step-by-Step Action Plan
- Stop Sales: Pull the item immediately.
- Issue Refund/Recall: proactively offer refunds and warn customers.
- Contact Insurance: File under “Product Liability.”
- Demand Vendor Defense: Have your insurer subrogate (sue) the POD company. Your insurer pays you, then they go fight the manufacturer.
FAQ
Does this apply to digital products?
No. A PDF causing a virus is “Cyber Liability” or “E&O,” not Product Liability.
What if I made them in my garage?
Then you are the Manufacturer. You definitely need Product Liability.
Are food items covered?
Selling supplements/coffee? That is high risk. You need specific “Consumables” product liability. Standard policies exclude ingestibles.