I Only Import, I’m Not the Manufacturer – Are You Sure?
Many businesses in Australia operate under the assumption that as long as they’re only importing goods, they bear no responsibility for product defects or failures. After all, they’re not the manufacturer, right? Well, not necessarily. Under Australian Consumer Law (ACL), if you import goods into Australia and the actual manufacturer has no office in the country, then you are legally deemed to be the manufacturer. And with that status comes a host of legal obligations and insurance requirements.
Understanding Your Legal Liability
The Australian Consumer Law, which is part of the Competition and Consumer Act 2010, clearly states that where a manufacturer is not based in Australia, the importer is considered the manufacturer. This means that if a product you import is defective, unsafe, or does not meet Australian safety and quality standards, your business could be held responsible.
As the deemed manufacturer, you must ensure that:
* The product complies with Australian safety standards and regulations.
* Any defects or safety concerns are addressed promptly.
* Consumers are provided with appropriate remedies such as refunds, replacements, or repairs.
Failure to meet these obligations can lead to significant legal consequences, including penalties, product recalls, and potential lawsuits from consumers who suffer losses or injuries due to the defective goods.
The Importance of Insurance Protection
Given the legal risks associated with being deemed the manufacturer, it’s critical that importers have the right insurance in place. The key types of insurance protection to consider include:
1. Product Liability Insurance
Product liability insurance is essential for any business importing goods. If a consumer suffers injury or property damage due to a defective product, this insurance helps cover legal costs and compensation claims. Without it, your business could be exposed to financial ruin in the event of a lawsuit.
2. Public Liability Insurance
While public liability insurance mainly covers incidents that occur on your business premises, some policies extend to cover product-related claims. However, it should not be relied upon as a substitute for proper product liability coverage.
3. Professional Indemnity Insurance
If you provide advice, design input, or modifications to the imported product, professional indemnity insurance can protect you against claims arising from professional negligence or errors.
4. Recall Insurance
If a defective product requires a recall, the costs can be significant. Recall insurance can help cover expenses related to notifying customers, removing products from shelves, and replacing faulty goods.
What Should Importers Do Now?
If you’re importing products into Australia, it’s time to review your business practices and ensure you’re adequately protected. Here are some steps you can take:
Verify the manufacturer’s presence in Australia – If they don’t have an office here, assume you’re the deemed manufacturer.
Check compliance with Australian standards – Conduct product testing and certification where necessary.
Review and update your insurance policies – Make sure you have adequate product liability and recall coverage.
Have clear supplier agreements – Ensure your overseas manufacturer takes responsibility for defects where possible.
Stay informed – Laws and regulations change, so keep up to date with ACL requirements.
Conclusion
Many importers don’t realise they carry the same responsibilities as manufacturers under Australian Consumer Law. Ignoring these obligations can lead to serious financial and legal consequences. Protect your business by understanding your liabilities, ensuring compliance, and securing the right insurance coverage. Don’t leave it to chance—be proactive and safeguard your business today.