Although the manufacturing sector plays an important role in the Australian economy, contributing some $118 billion to our gross domestic product (GDP), obtaining liability cover can be a patchy endeavour. It can take time and patience for manufacturers to piece together the policies they need, which are often optional add-ons and not universally available. Now Gallagher insurance partner CGU has launched a purpose designed, standalone manufacturing liability policy.
For eligible manufacturing businesses, the policy provides full scope cover and up to $50,000,000 capacity for any product liability claim across a broad range of industries and segments across Australia (excluding chemicals). This includes professional indemnity and broad-form liability to support growth and business challenges without the need to renegotiate insurance cover.
What are the key inclusions in this manufacturing liability cover?
- (Coronial etc.) inquiry cover included as standard instead of excluded or 'silent' in policy
- Cover for products and personnel includes the United States
- Cover personnel extends to principals who are business partners
- Cover also protects against damage to third party goods held in custody
Extensions: advantages over most manufacturing liability policies
- Instead of applying only to services rendered, professional indemnity includes issues with design, storage or use of the products
- First and third party benefits, breach of contract and cover for errors and omissions (E&O) are provided automatically, with no need to apply or opt in
- Cover for errors and omissions (E&O) is not limited to products and includes design and advice on all business owned products
- Cover for breach of contract in relation to manufactured products
- Cover for product recall expenses
- Protection for vendors' liability
- Costs of claims preparation
Case study 1: Errors and omissions in metal component fabrication job
A metal fabrication company was contracted to create customised metal components for a construction project. In spite of careful planning and communications an error occurred due to a miscalculation in the design of the components, which consequently failed to meet specifications.
Since this caused delays and additional expense for the client they filed a claim against the metal fabrication company for financial loss due to error and design.
By holding this standalone manufacturing liability cover the fabrication company was covered for the cost of settling the claim under the errors and omissions provision.
Case study 2: Product recall expenses associated with listeria scare
When a food manufacturer discovered the presence of listeria during routine testing they immediately moved to recall all distributed items and to quarantine any from the same batch as the positive sample to ensure no contaminated product was consumed.
The recall expenses included the cost of freight and drivers across Australia, administration, disposal and hygienists' fees, laboratory costs and expenses for engaging a public relations consultant.
Manufacturing cover can be tailored to individual business's needs
To accommodate manufacturing businesses of all types and sizes the limits and sub-limits on the standalone liability cover can be adjusted up or down as required.
For businesses with nuanced exposures (from low hazard to high hazard, worker to worker or third party risks) this standalone manufacturing liability cover provides flexibility to enable tailored solutions for individual businesses.
How Gallagher can help
Our specialist brokers understand how manufacturing risks can cascade through supply chain disruptions to threaten contractual agreements and business relationships. They are committed to give you manufacturing insurance to ensure seamless coverage and the ability to face the future with confidence.
