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Arduino (a company that sells educational electrical kits to kids) must have some protection against kids accidentally blowing up electrical circuits (and getting hurt or burned) when first learning to use their products. How does a company like Arduino protect itself against injuries or possible lawsuits?

Similarly, how does a company like Nerf protect against kids shooting each other in the eye, causing irreversible eye damage, and parents possibly suing the company? How does Nerf handle these situations?

Would an LLC help protect the owners from these possible problems?

Thanks for your time.

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  • It should be noted that both products have taken pains to make them as safe as possible to use - for one thing, the voltages in an Arduino are quite low, for a number of reasons, and blowing up a chip or other component on one would be quite a feat. Dec 16 '20 at 7:41
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They purchase liability insurance. Then, if they are found liable, the insurer covers some proportion of the damages that the company is ordered to pay.

An LLC will protect the LLC's owners from being held personally liable for the LLC's liabilities, but the LLC is not itself protected from liability.

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I've not researched the detail, but all products should be independently quality and safety tested before going to market to meet the relevant government safety regulations.

This would require the manufacturer and retailer to ensure the product has suitably clear warning labels on the packaging and instructions on the proper (and therefore safe) use of the item - with words to the effect "do not aim at someone's eyes" or "do not short circuit the battery."

ETA

Would an LLC help protect the owners from these possible problems?

It goes a long way towards the desired protection but it is not absolute. I cannot speak for the US-specific LLC, but in the UK if the consent or negligence of a director of a limited company causes their company to breach health and safety law then they may be held personally liable and duly prosecuted. Obviously, consent or negligence has to be proved.

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