If you’re a manufacturer, wholesaler-distributor or product importer, you can face tough risks – liability challenges that your carrier may not cover under a standard general liability policy.
- If your product was the subject of an investigation and lawsuit, will your carrier act as a tough negotiator, navigate the legal system and appropriately represent you/your business?
- Is your business at risk for potentially severe claims (could your product ever cause fatalities, severe bodily injury or property damage)?
- Can you handle the legal defense costs if a fatality or severe injury were to occur as a result of the use of your product?
To prevent accidents and run a safe, profitable business, you need a specialty insurance solution for your unique operation. You also need a partner that understands your business and the risks involved – someone you can trust to represent you and your business if a severe claim occurs. When choosing a carrier to partner with, ask about their specialty insurance coverages to help ensure your business is prepared and protected from tough risks.
- Risk management: Your carrier should understand your industry and the high hazard insurance exposures your business faces. They should work with you to evaluate your operations, identify risks and develop an effective and realistic safety and risk management program to help you avoid losses. Choose a carrier with a dedicated risk engineering team that understands specialty insurance needs, provides technical expertise and consults with you to create solutions that positively impact your business’ bottom line.
- International protection: Many general liability policies will only cover lawsuits brought in the U.S. The right specialty insurance policy can help protect your business if you export products and services and/or engage in travel abroad.
- Excess coverage for catastrophic losses: Your business may require higher limits to cover you in the event of a severe or catastrophic loss. If the cost of a claim exceeds the limits of your business’ primary insurance policy, having these higher limits up to $25M can protect you from having to pay out of pocket for legal fees, medical bills and damage expenses that exceed your primary business coverage.
- Dedicated claims specialists: If a loss occurs, you want a carrier that not only helps you manage claims, but evaluates ways to help reduce their severity and cost. Look for a partner with a dedicated claims team for high hazard insurance exposures and specialists in negotiations and litigation.
Don’t hesitate to ask your carrier about their customer retention. Providing coverage for tough exposures requires a tailored approach and an ability to build close partnerships. If customers are loyal, chances are they value their relationship with the carrier and trust that their business is protected.
Consider This Scenario
A commercial manufacturer builds lawnmowers primarily sold to landscaping companies. Most of the liability claims impacting this manufacturer involve operator injury when the mower turns over because it was used on an incline or because the operator placed a hand or foot under the moving blades – both instances contrary to the instructions and warnings on the machine. On one particular occasion though, a landscaping crew tries to start up the lawnmower in the back of their company box truck. The lawnmower explodes, the roof of the truck is burned through, and one of the landscapers involved dies as a result of his injuries. Is the manufacturer at fault?
In this particular case, the manufacturer was not held liable for the injuries sustained in the explosion nor the fatality.
Here’s why:
- Within just ten days of the event, the manufacturer’s insurance carrier engaged a team of counsel and a fire cause-and-origin expert. That team traveled with a representative from the insured to examine the remains of the box truck and its contents.
- The inspection led to the conclusion that the mower was not the primary fuel source for the explosion, though it may have been the source of ignition. The inspection report included details about the mower’s design, including the fact that it was designed with a fuel injection system – so there should be no exposed spark – and the clear warnings in the owner’s manual and other mower materials stating the dangers of gasoline and a running engine.
- Additionally, it was noted that the owner had completed his own maintenance on the machine rather than going to a licensed repair shop, and there were issues with the rigging of wire harnesses.
- Although additional joint inspections of the truck and contents were completed by legal teams for both the plaintiff (owner) and defendant (manufacturer), all of the pre-work enabled the manufacturer’s legal team to clearly articulate why the manufacturer was not at fault.
Ultimately, no claim was brought against the manufacturer. While this may not be the case in every situation, the manufacturer and insurance carrier working together created an opportunity for early claim intervention. The relationship they built enabled the claim to be addressed quickly and efficiently, without the fanfare and expenses associated with prolonged litigation.
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