Rights of Recourse - Importing from China

[Deleted member 313582]

Hi everyone I'm trying to get product liability insurance for some bamboo products (e.g. soap dishes) I import from China. The insurance company have quoted me £180 for the year if rights of recourse are in place or £800 if rights of recourse are not in place. So I've been trying to get rights of recourse from my supplier, who I've been using regularly for a few months and have a good relationship with. We generally place an order, receive an invoice and pay it then goods are sent, so there's no proper contract in place.

I originally asked the company to see the contractual obligations/terms and conditions between us. They sent me a contract with the goods I've bought and it had some terms and conditions on it but did not mention who has liability for products not fit for purpose.

I then asked more directly whether rights of recourse were in place between us and explained that this meant if a product were not fit for purpose they would be liable, not me. They replied with 'We will be responsible for the quality issues of our products.' Does this mean rights of recourse are in place?

The insurance company doesn't want to see the rights of recourse, just to know whether they are in place. Or should I just write some rights of recourse myself and ask them to sign it? Or the other option is to just pay the higher fee with the insurance company.

I'd really appreciate any help

 

[Mr D]

Hi everyone I'm trying to get product liability insurance for some bamboo products (e.g. soap dishes) I import from China. The insurance company have quoted me £180 for the year if rights of recourse are in place or £800 if rights of recourse are not in place. So I've been trying to get rights of recourse from my supplier, who I've been using regularly for a few months and have a good relationship with. We generally place an order, receive an invoice and pay it then goods are sent, so there's no proper contract in place.

I originally asked the company to see the contractual obligations/terms and conditions between us. They sent me a contract with the goods I've bought and it had some terms and conditions on it but did not mention who has liability for products not fit for purpose.

I then asked more directly whether rights of recourse were in place between us and explained that this meant if a product were not fit for purpose they would be liable, not me. They replied with 'We will be responsible for the quality issues of our products.' Does this mean rights of recourse are in place?

The insurance company doesn't want to see the rights of recourse, just to know whether they are in place. Or should I just write some rights of recourse myself and ask them to sign it? Or the other option is to just pay the higher fee with the insurance company.

I'd really appreciate any help

Should you ever claim from insurance company and have to supply the information they want, do you want to have written the rights of recourse yourself?

 

[Deleted member 313582]

Should you ever claim from insurance company and have to supply the information they want, do you want to have written the rights of recourse yourself?

Are you suggesting I get a lawyer to write it up?

 

[MOIC]

If your supplier offers right of recourse, then your insurance company will forward all claim costs to your supplier should there be a claim against their product.

Speak to your insurance company and ask them specifically what safeguards are required for this product, given its a bamboo soap dish.

No company (whether in China or elsewhere) will offer general rights of recourse as this infers that any claim, howsoever caused, can point to the responsibility of the manufacturer.

 

[Deleted member 313582]

If your supplier offers right of recourse, then your insurance company will forward all claim costs to your supplier should there be a claim against their product.

Speak to your insurance company and ask them specifically what safeguards are required for this product, given its a bamboo soap dish.

No company (whether in China or elsewhere) will offer general rights of recourse as this infers that any claim, howsoever caused, can point to the responsibility of the manufacturer.

Thanks for the reply. I've asked the insurance company multiple times to specify what exactly they want on the rights of recourse but their response every time is 'I cannot provide any sort of advice on whether rights of recourse is included in the contract or not. We only need to know whether it is included or if it is not included '

I'm quite tempted just to pay the higher fee. We import 6 different products from this company: dishcloths, steel drinking straws, bamboo straws, bamboo soap dishes, bamboo phone holder, bamboo toothbrush and this range is increasing.

 

[Business Insurance]

If the insurer can not recover there money from the manufacturer because rights of recourse are not in place, they will expect you to pay a higher premium. If there is an issue and they can look to recover there money from the manufacturer, it will be cheaper. The other option is to agree a right to recourse with the manufacturer. If you sell from a number of manufacturers in Asia my advice would be to pay the increased premium....Let me know if you need some quotes.

 

[Deleted member 313582]

If the insurer can not recover there money from the manufacturer because rights of recourse are not in place, they will expect you to pay a higher premium. If there is an issue and they can look to recover there money from the manufacturer, it will be cheaper. The other option is to agree a right to recourse with the manufacturer. If you sell from a number of manufacturers in Asia my advice would be to pay the increased premium....Let me know if you need some quotes.

Thanks for the advice

We've now sorted this and are paying the premium. Thanks anyway!

 

[CHUKTC]

Hi Thomas I think that was wise. Remember any contract you enter into with a Chinese company will be written in Chinese. An English translation is just that and will have no basis in a Chinese court. It is important to get any agreement checked to make sure the Chinese version is correct. It sounds like you have a good relationship with the company which really helps and hopefully they will be keen not to loose your repeat business which will probably be the best guarantee you can get in terms of the quality being maintained.
Even if you have an agreement (something we regularly do for our clients) enforcing it in a Chinese court, should the need ever arise, is no easy task for a foreign company.

 

[Natty12]

Thanks for the advice

We've now sorted this and are paying the premium. Thanks anyway!

Hi Thomas
Do you mind me asking which insurance you went with? I’m also struggling to find insurance for my eyelash business as importing from China.

 

[NikkyJ]

Hi Thomas
Do you mind me asking which insurance you went with? I’m also struggling to find insurance for my eyelash business as importing from China.

Hi Natty, did you manage to find a insurance for your eyelash company yet ? I am currently looking for the same. We spoke with one insurance place but they are also asking for a rights of recourse.

 

[User2023]

Hi has anyone managed to get a insurance company in the Uk to insure with a right to recourse? we have been looking for sometime as wish to launch a new product, but this is holding us back. the manufacturer has agreed to right to recourse but are wanting a document, we have no expertise in setting this up, can anyone advise ?

Hi Thomas I think that was wise. Remember any contract you enter into with a Chinese company will be written in Chinese. An English translation is just that and will have no basis in a Chinese court. It is important to get any agreement checked to make sure the Chinese version is correct. It sounds like you have a good relationship with the company which really helps and hopefully they will be keen not to loose your repeat business which will probably be the best guarantee you can get in terms of the quality being maintained.
Even if you have an agreement (something we regularly do for our clients) enforcing it in a Chinese court, should the need ever arise, is no easy task for a foreign company.

Hi can you help with setting up an agreement document for right to recourse for a Chinese manufacturer for us?

 

[User2023]

If the insurer can not recover there money from the manufacturer because rights of recourse are not in place, they will expect you to pay a higher premium. If there is an issue and they can look to recover there money from the manufacturer, it will be cheaper. The other option is to agree a right to recourse with the manufacturer. If you sell from a number of manufacturers in Asia my advice would be to pay the increased premium....Let me know if you need some quotes.

We would be interested in getting quotes for this, do you also write the rights to recourse documents ? The manufacturer has agreed but we would like documents in both English and Chinese if possible.

 

[MOIC]

@Frank the Insurance guy

 

[CHUKTC]

Hi has anyone managed to get a insurance company in the Uk to insure with a right to recourse? we have been looking for sometime as wish to launch a new product, but this is holding us back. the manufacturer has agreed to right to recourse but are wanting a document, we have no expertise in setting this up, can anyone advise ?

Hi can you help with setting up an agreement document for right to recourse for a Chinese manufacturer for us?

Yes we can get the agreement drawn up for you in Chinese with an English translation. However as per the threads above we would need you advise the terms you wish to have in the 'right to recourse' we can then talk to your supplier to negotiate a suitble agreement 9assuming they are willing).

 

[User2023]

Yes we can get the agreement drawn up for you in Chinese with an English translation. However as per the threads above we would need you advise the terms you wish to have in the 'right to recourse' we can then talk to your supplier to negotiate a suitble agreement 9assuming they are willing).

Thankyou, sounds good. Our insurer is requesting that the goods are fully supported but the supplier in the event of a claim against us, we would also require the supplier to be willing to within a agreeable time frame replace or repair the goods should there be seen to be fault additional to the above.

 

[User2023]

@Frank the Insurance guy

Are you a shipping forwarder?

 

[MOIC]

Are you a shipping forwarder?

We ship from China, but quite honestly you're best advised to ship via your supplier for this shipment. It's small and they'll get competitive rates.

 

[Gyumri]

Forgive me if I sound skeptical but how is an insurer actually going to meet any claim if the supplier is providing a warranty via a right to recourse agreement?

If the scope of the right to recourse agreement is wide enough to deal with most eventualities then is the insurer obliged to pay anything at all to the insurered in order to meet a claim?

It is pointless paying a premium to insure a risk if the insurer is not going to cough up anything to settle a claim.

 

[CHUKTC]

Thankyou, sounds good. Our insurer is requesting that the goods are fully supported but the supplier in the event of a claim against us, we would also require the supplier to be willing to within a agreeable time frame replace or repair the goods should there be seen to be fault additional to the above.

If you wish us to assist probably best to get in touch with us by email [email protected]

 

[MOIC]

Why would you want insurance against a bamboo soap dish??

 

[Gyumri]

Why would you want insurance against a bamboo soap dish??

It could be eaten by a pet Panda? Or a customer's soap might slip off onto the floor and an innocent person steps on it and goes belly up.

Bamboo soap dishes are potentially accidents waiting to happen and therefore require a high premium etc.

 

[MOIC]

Or a customer's soap might slip off onto the floor and an innocent person steps on it and goes belly up.

I would insure the soap.

 

[Gyumri]

I would insure the soap.

And the customer's foot.

 

[DoolallyTap]

Perhaps all soap dishes are potentially accidents waiting to happen. Should all soap dishes be outlawed?

 

[Gyumri]

The OP will clearly have to be careful when selling his bamboo soap dishes:-

Branded a criminal for selling GOLDFISH to a boy aged 14: Pet shop owner fined £1,000 and told to wear electronic tag

Great-grandmother Joan Higgins, 66, was caught by council bosses in an undercover investigation after she unwittingly sold the fish to the 14-year-old boy, breaching new animal welfare laws.

www.dailymail.co.uk

 

[Frank the Insurance guy]

Forgive me if I sound skeptical but how is an insurer actually going to meet any claim if the supplier is providing a warranty via a right to recourse agreement?

If the scope of the right to recourse agreement is wide enough to deal with most eventualities then is the insurer obliged to pay anything at all to the insurered in order to meet a claim?

It is pointless paying a premium to insure a risk if the insurer is not going to cough up anything to settle a claim.

Insurers will insist on you having rights of recourse against a supplier. This does not mean that the insurer is "not going to cough up anything to settle a claim".

The purpose of Insurance is to protect the policyholder
- eg. If the product is faulty and causing the customer an injury. The customer will pursue a claim against the seller (ie. the policyholder). At this point the insurance policy is triggered and Insurers will deal with the claim, including any legal costs and payments for damages etc. There could be significant costs and payments here, which the UK insurer will pay. However subsequent to any costs/payments, the insurers may "subrogate" against the China supplier, to attempt to recover their costs from the supplier - to do so they will use the rights of recourse in place against the supplier. Whether the insurer recovers any payments from the supplier, the Policyholder will still be covered and insurers will pay the legal costs and any claims payments.

Without Insurance, the OP will need to deal with any claims themselves, paying legal costs and any damages etc. They will then incur their own costs in trying to pursue their supplier (there is no guarantee that they will get anything!).

 

[Gyumri]

The OP should go into a less risky business than selling bamboo soap dishes.

 

[japancool]

The chances of a bamboo dish being eaten by a pet panda in the UK is statistically minimal.

 

[User2023]

We ship from China, but quite honestly you're best advised to ship via your supplier for this shipment. It's small and they'll get competitive rates.

Thankyou, we ship fairly regularly from china interested to find an agent that we can get better rates.

 

[DoolallyTap]

Thankyou, we ship fairly regularly from china interested to find an agent that we can get better rates.

All agents are going to be very competitively priced, to get a better rate you need to email everyone for their prices.
What does fairly regularly mean, parcels by Fedex DHL etc. Containers by sea freight, pallets by air freight?

 

[m4hmo]

Thanks for the reply. I've asked the insurance company multiple times to specify what exactly they want on the rights of recourse but their response every time is 'I cannot provide any sort of advice on whether rights of recourse is included in the contract or not. We only need to know whether it is included or if it is not included '

I'm quite tempted just to pay the higher fee. We import 6 different products from this company: dishcloths, steel drinking straws, bamboo straws, bamboo soap dishes, bamboo phone holder, bamboo toothbrush and this range is increasing.

Don't say so much about what you do else someone like me might have a go too. In fact I might just do a bit of research on this. Been looking at leather products myself personally.