US Product Recalls and Liability Claims: What Taiwan Brands Selling on Amazon Must Know

When a US consumer is harmed by a product, they (or their attorney) can pursue a claim under three theories. Understanding these determines what makes your product legally risky.

Strict liability: the manufacturer (and potentially the seller) is liable for injuries caused by a product in a "defective condition unreasonably dangerous to the user" — regardless of negligence. If the product is defective (manufacturing defect, design defect, or failure to warn), strict liability applies. In strict liability states, the plaintiff does not need to prove you were careless — only that the product was defective and caused the injury.

Negligence: the manufacturer failed to exercise reasonable care in design, manufacturing, or providing warnings. This theory requires proving that a reasonable manufacturer in your position would have acted differently.

Breach of warranty: the product failed to meet an express warranty (e.g., "waterproof to 30 meters" when it is not) or an implied warranty of merchantability (that the product is fit for ordinary purposes). Amazon product listings can create express warranties through specific performance claims — be accurate.

For Amazon sellers, an important development: US courts have increasingly held that Amazon can be liable as a "seller" for defective third-party marketplace products under state strict liability law, even when Amazon did not manufacture the item. This has created pressure on Amazon to require insurance from third-party sellers.

The Consumer Product Safety Commission (CPSC) has authority to issue mandatory recalls of consumer products that present a "substantial product hazard." The CPSC also works with companies on voluntary recalls — which, despite being called "voluntary," are usually initiated after CPSC contacts the company with evidence of hazard.

Reporting obligation: companies must report to CPSC within 24 hours of obtaining information that reasonably supports the conclusion that a product (1) creates a substantial risk of injury to the public, (2) contains a defect which could create a substantial product hazard, or (3) creates an unreasonable risk of serious injury. This is a legal obligation under Section 15(b) of the Consumer Product Safety Act. Failure to report in a timely manner can result in civil penalties up to $1.825 million per violation.

When a recall occurs: CPSC and the company announce the recall jointly through CPSC's website (cpsc.gov), major media, and direct notification to retailers. Amazon removes recalled products from its platform and notifies buyers. The company typically offers refunds, replacement products, or repairs.

For Taiwan brands: recalls do not require a US entity. The foreign manufacturer, US importer, or distributor can conduct a recall. CPSC has jurisdiction over any product sold in the US market regardless of where it was manufactured. If CPSC contacts you about a product safety issue, respond immediately — do not ignore regulatory communications.

Amazon requires sellers in certain product categories to maintain product liability insurance with minimum coverage of $1 million per occurrence (aggregate coverage varies by policy). The policy must name Amazon as an additional insured. Categories requiring this insurance include children's products, electronics, tools, sports equipment, and others with elevated injury risk.

Amazon may request evidence of insurance at any time. Failure to provide requested insurance documentation can result in account suspension. Additionally, if a customer files an A-to-Z claim or a product liability lawsuit and Amazon is named, Amazon may seek indemnification from the third-party seller under their Business Solutions Agreement.

Product incident reports: when a customer reports a product injury through Amazon's complaint system, Amazon may contact you requesting a response, documentation of product safety testing, and a description of corrective actions. Respond to these requests promptly and professionally — non-response escalates the situation to possible listing removal.

Step 1 — Design and test to applicable standards: products tested and certified to relevant safety standards (CPSC regulations, ASTM standards, UL listing) have a strong "state of the art" defense in strict liability claims. If your product meets or exceeds applicable standards, the risk of a design defect claim is substantially reduced.

Step 2 — Clear and complete warnings: the "failure to warn" theory is often the easiest for plaintiffs to prove. Include clear warnings for foreseeable misuse, age restrictions for children's products, and specific hazard warnings required by CPSC for your category. Product warnings must be in English and on the product or its immediate packaging.

Step 3 — Maintain documentation: preserve quality control records, batch testing results, material certifications (RoHS, REACH), and manufacturing process documentation for at least 10 years. In litigation, a company that cannot produce quality records from the time of manufacture looks negligent even if it was not.

Step 4 — Product liability insurance: obtain a policy before your first US sale. A $1 million per occurrence / $2 million aggregate policy for a consumer product company typically costs $800–3,000/year depending on product category and revenue. This is a legal requirement for some Amazon categories and a practical necessity for any brand with meaningful US sales volume.