For the longest time, product liability was treated as something that only surfaced after a crisis. A claim would arrive, lawyers would step in, and the business would try to contain the damage. Today, however, the scale of product exposure makes liability a constant strategic factor.

As data from the National Safety Council shows, there were over 15 million consumer product-related injuries that received treatment in emergency departments in 2024. This represented an increase of 18.2% compared to 2023. Those numbers seem to keep going up and reflect how widely products are used and how quickly risk can spread across markets.

What this means for you, whether you run a small manufacturing firm or oversee a global brand, is that product liability is woven into daily operations. Ignoring it does not make it disappear. It only makes the eventual impact harder to manage and far more expensive than expected. Today, we’ll look at three reasons why you should be more prepared for it. 

#1. Digital Transparency Has Changed Litigation Risk

A decade ago, a defective product might generate scattered complaints that took months to connect. In 2026, this is no longer the case. Customers post photos, videos, and detailed accounts within hours of experiencing a problem. Those posts then circulate widely before a company’s internal reporting system even flags an anomaly.

This is why online reviews, discussion forums, and social platforms should often function as your informal early warning systems. Many plaintiffs’ firms monitor these channels closely to identify patterns and reach out to potential claimants at scale. 

Likewise, digital transparency also affects evidence. Emails, internal chats, testing records, and customer complaints are increasingly prone to leaks and can shape the narrative long before a case reaches trial. 

Besides, despite restrictions, jurors and regulators now operate in an environment where information spreads quickly, and reputational judgments form early. 

For your company, this means that product liability risk is directly tied to communication strategy. In other words, monitoring digital feedback, responding consistently, and documenting corrective actions are no longer optional public relations steps. 

#2. One Product Can Trigger Multi-Year, Multi-Hundred-Million Dollar Cascades

Modern litigation frequently consolidates claims into large coordinated proceedings. Multi-district litigation structures allow courts to centralize similar cases, which increases efficiency but also concentrates financial exposure. Once hundreds of plaintiffs are grouped, the pressure to resolve the matter intensifies. The Enfamil lawsuit situation shows exactly how this can happen.

As TorHoerman Law explains, Mead Johnson’s cow-milk-based formulas for premature infants appear to significantly increase the risk of necrotizing enterocolitis (NEC). This is a severe disease that’s often fatal, and many families allege that the warnings were inadequate.

As Top Class Actions reports, the NEC multi-district lawsuits have now reached a total of 950 claims. There have also been a wide range of settlement outcomes, ranging from $60 million for Enfamil to $495 million for Similac. When cases reach that scale, settlement decisions often involve complex calculations about public perception, ongoing defense costs, and long-term brand stability.

To make matters worse, competitors sometimes capitalize on uncertainty in the market, which can shift market share during prolonged litigation. Before you know it, a single product issue has the potential to evolve into a multi-year business challenge that affects operations.

#3. The Cost Structure of Liability Extends Beyond Settlements

Many executives focus on verdict amounts or settlement headlines, yet the financial consequences are often bigger than expected. As the Insurance Information Institute (III) reports, net premiums written for product liability insurance were over $4.5 billion in 2024. 

What’s more, product liability defense costs are extremely high compared to losses. In 2024, defense costs were $769 million or 33.6% of the losses incurred. Those defense costs represent resources spent simply to respond to claims, regardless of whether the company ultimately prevails.

In 2025, one manufacturer reported $374 million accrued for ‘probable product liability claims’ according to an annual report by the SEC. The same manufacturer also paid out $182.5 million and $227.1 million for probable insurance recoveries related to product liability accruals. 

It goes without saying that these accruals affect earnings projections, investor confidence, and borrowing capacity. Thus, if your reserves grow, you must account for them in strategic planning, which can invariably delay expansion and reshape long-term priorities.

Frequently Asked Questions