Manufacturers E&O Insurance

We offer manufacturers errors and omissions (E&O) insurance to manufacturers in all industries from various insurance companies. Manufacturers E&O insurance is designed to fill a gap in coverage that is not addressed by other insurance policies. While the product liability coverage included in commercial general liability insurance policies is designed to provide protection against bodily injury and property damage claims, manufacturers E&O insurance is designed to provide protection against the financial loss suffered by a third party and caused by a manufacturer's product.

There are many scenarios under which a manufacturer could become liable for the financial loss suffered by a third party due to the manufacturer's product. An example is a manufacturer of car parts is a supplier to a car manufacturer and supplies parts that are found not to be to specifications after they were delivered. The car manufacturer has to stop its production line and wait for new parts and later files a lawsuit against the part manufacturer for the financial loss it suffered.

It is therefore vital for manufacturers to mitigate their exposure to errors and omissions claims through a manufacturers E&O insurance policy with an adequate policy limit.

What coverage is provided by manufacturers E&O insurance?

Manufacturers E&O insurance is a type of professional liability insurance that provides protection against acts, errors and omissions committed by the insured and that cause a financial loss to a third party. The act, error or omission committed by the manufacturer is typically based on negligent design or manufacturing or an issue with the service it provided its clients.

Manufacturers E&O insurance provides coverage for legal expenses and damages that the insured is legally obligated to pay to a third party based on an E&O claim. In general, manufacturers E&O insurance is designed to provide coverage for products that have been completed and where a claim is made based on allegations of faulty design, materials, installation, or workmanship. The specific policy coverage varies by insurance company and can usually be tailored to fit an insured's specific needs.

Due to the legal and cost uncertainties associated with a manufacturer's exposure to E&O claims, it is important for manufacturers have manufacturers E&O insurance in place with an adequate policy limit.

What's the difference between a claims made and an occurrence policy?

Manufacturers E&O insurance policies are typically available on a claims made basis. A claims made policy covers claims reported during the policy period, as long as the claim was incurred after the retroactive date. The retroactive date is usually set as the first day of coverage of the first claims made policy ever purchased and should not be changed at policy renewal. The policy must be renewed every year in order to keep the coverage for prior acts. However, if the claims made policy is nor renewed and a claim is subsequently reported, no coverage will be available even if the claim was incurred while a policy was in effect. To remedy this situation, a tail endorsement is available to be purchased when an insured decides to cancel or non-renew their policy.

An occurrence policy covers claims incurred during the policy period, even if the claim is reported after the policy expires. Occurrence policies are widely used in other lines such as automobile and homeowners insurance.

Give us a call to discuss your manufacturers E&O insurance needs.

We operate in the following states: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Utah, Vermont, Washington, Wisconsin, Wyoming