EQ Legal Liability

 

Mr. Nichols,

 

In response to your email below, EcoQuest has product liability insurance.  However, it is important for EcoQuest dealers to obtain their own insurance to meet their particular needs.  Since every dealer’s personal and financial status is unique to them, EcoQuest cannot advise what coverage should be obtained for all dealers, in all instances.

 

Technically, EcoQuest does not indemnify its dealers.  That means that a dealer will be responsible for his or her apportioned share of responsibility if something goes wrong and there is a claim of liability.  As a practical matter, unless there is some indication of wrongdoing or negligence on the part of the dealer, EcoQuest will defend the claim and pay the liability.  EcoQuest’s position with respect to this issue is based upon the facts of each individual case; this is not a promise that EcoQuest will defend every dealer in every circumstance.  That is why insurance coverage is important for a dealer to consider.

 

For example, assume the following hypothetical.  An EcoQuest product in use in a residence bursts into flame and causes damage in that room of the home.  The homeowner and his subrogated insurance carrier file a claim against EcoQuest and the dealer who sold the machine.  The fire marshal’s report and the report of the forensic engineer indicate that an electrical connection inside the machine had been made incorrectly, had caused a short that resulted in flames.  The machine was brand new, had just been taken out of the box the day before, and had never been used previously.

 

Such a hypothetical, absent more, is clearly the result of a manufacturing defect and is the responsibility of EcoQuest.  EcoQuest would expect to have to recognize liability under such facts and would offer legal assistance to the dealer to get out of the suit.

 

Change the facts just a little; the machine that caused the fire had been used by the dealer in several in home demos, previously, and had been “refurbished” by the dealer before it was sold, as a new machine, to the homeowner.  The dealer had dismantled the machine as part of his attempted “refurbishing” and had reconnected the electrical connections improperly, resulting in the  flames.  Under those circumstances, EcoQuest will work with the dealer’s insurance company and legal counsel, but would NOT be inclined to offer a legal defense NOR indemnification to the dealer.

 

That is why there is no concrete answer to the question of “What happens if there is a claim of liability?”  The best answer EcoQuest can provide is that “…it depends”.  It depends upon the apportionment of fault, based upon the facts.

 

 

Sonda Church

Executive Assistant

Phone:  888.285.6114

Fax: 423.798.6412

Email:  sondac@ecoquestintl.net