Many countries are enforcing the Product Liability Act to ask the responsibility for the supply of the safe products. Thus, the safety of the product becomes one of the most important elements in modern corporate management. Diamond tool industries producing risk-high products cannot make an except to this situation. This research presents how Diamond tool manufactures in korea to respond effectively to Product Liability through construction of Product Safety Management System.

A company is liable for its products and has the responsibility to make good on any loss or damage incurred by the user of its product. The purpose of the Product Liability Act(PLA) is to protect consumers against damage caused by defective products, and contribute to the safety of the citizen's life and the sound development of the national economy by regulating the liability of manufacturers, etc. for damages caused by the defectiveness of their products. In this study, the cognition levels of consumers and producers for PLA were surveyed. The cognition levels of four factors of acknowledgement, comprehension, necessity and impact for PLA were assessed. The results were as follows : i) Acknowledgement and comprehension levels of consumer were assessed low but they assessed necessity and impact of PLA high; ii) Producers assessed necessity and impact of PLA higher than their acknowledgement and comprehension levels; iii) Overall cognition levels of producers were higher than those of consumers.

A law of Korean product liability was enforced on 1st in July for 2002 years. Although it is later than the United States in 25 years, and more later than Japan in 7 years, it have been welcomed a new chances promoting the preservation of consumer"s safety and increasing business compactability toward the small and medium size enterprises. Up to now, The a large enterprise, which have concentrated in export of an advanced country, have already the resistant power against the law of Korean product liability, but the Korean medium and small-sized enterprises were concentrated mainly a domestic market or subcontracting business of a major big company. Relatively very week positions on this Low. If They cannot supply the most safest product in the market, then Those enterprise are confronting the difficulty for surviving. Now the product safety has become more important role to the small and medium size company. Therefore, this paper offered the object and the direction how the company must carry out measures on this product design stage applying safe engineering and Ergonomic Technology for the achieving ongoing development and progress of small ann medium size industry in Korea.