This may involve another expensive lawsuit, and if the manufacturer is broke, the seller is out of luck. There are two things that a seller might do for protection. First, incorporate or use another business form that offers limited liability. The second method of self-protection is to obtain insurance. You should consult your insurance broker or agent to ascertain the rates in your particular area.
Many trade associations provide product liability insurance to their members for reasonable prices.
You should determine whether you can obtain this form of insurance from professional trade or business associates you are involved with. You must then evaluate this cost against the risk of a lawsuit. You can deduct the cost of this kind of insurance as a business expense for tax purposes. Given these factors, if there is any reasonable expectation that a purchaser of your product could sustain personal injury from it, you should seriously consider obtaining product liability insurance. Clearly, the area of product liability has evolved to a point where manufacturers are being held liable for injuries caused by their defective products.