The Canadian manufacturing industry is fiercely competitive, with supply chains that leave little room for disruption or error. Despite a growing amount of risks, many of the liability exposures faced by manufacturing companies aren’t addressed in traditional general liability or product liability policies.
Manufacturer’s Errors and Omissions (E&O) insurance can fill the gap in coverage to ensure your business has a comprehensive insurance program. Manufacturer’s E&O applies when your company is at fault for flawed materials, products, or workmanship that results in third party financial damage. This differs from General Liability, which provides protection for the financial damages resulting from a product failure that causes bodily injury or property damage to a third party.
Manufacturer’s E&O Scenarios :
- Your business manufactures a part for a client. After the part is delivered to the client, they discover that the part was incorrectly manufactured and cannot be used with their product. Since the error occurred during the creation of the part, your business would benefit from Manufacturer’s E&O in order to cover the costs associated with the design flaw.
- Your business is manufacturing a product for a client. This product takes longer than anticipated to complete and you inform the client that the product will be delivered after the deadline set in your contract. Your client sues you for the financial costs associated with delayed production. Your Manufacturer’s E&O coverage would respond to this loss.
In each of these example cases, a traditional Commercial General Liability policy would not respond to the losses, as neither resulted in an injury or any actual property damage.
Avoid being stuck with significant legal costs or damaging your industry reputation or client relationships by adding Manufacturer’s E&O coverage. Premiums will vary based on the type of product or service your company offers. Contact the team of expert brokers at Fuse Insurance today to get started on adding this coverage to your insurance package.
Fuse Insurance Ltd. is the evolution of the commercial insurance brokerage, and the first of its kind in Western Canada. Backed by policies from a selection of A-rated insurers, Fuse Insurance can provide coverage for businesses large and small from almost any industry. For further information or to get an online quote now, click here or call us at 1-866-387-FUSE (3873) for more details.