Manufacturer’s E&O in Canada: Getting the Right Coverage

When people buy a new product, they usually do so with the assumption that, if used as intended, the product will harm neither them nor their property. So when discussions arise regarding insurance and manufacturing, the primary concerns typically mentioned are the exposures related to the types and severity of bodily injury and property damage that can occur when products fail to function as intended. However, what is less often discussed is what happens when bodily injury or property damage does not occur, and instead the product fails to meet customers’ needs resulting in their financial loss. Since Commercial General Liability (CGL) coverage casts a wide net, such losses must be covered by CGL, right? Not necessarily.

Without an Errors & Omissions (E&O) policy, manufacturers may find themselves trying to navigate in the dark if a loss occurs they thought was covered by CGL. Simply put, there is no CGL coverage for their product or their work if it fails to perform its intended or warranted function when it does not cause any bodily injury and/or property damage. This is a very real risk for manufacturers of all shapes and sizes, and can have a significant impact on the stability and future success of their business if ignored.

Learn More About This Important Coverage

Manufacturers E&O insurance will cover both the customer’s financial loss and your defence costs. Most E&O policies are “claims-made policies,” which means that in order for the claim to be covered, both the work in question must be performed and the claim must be made during the policy period.

Contact Paul Christie team leader of PowerGuard Advantage, industry specialists helping service the energy and power sector with risk management and business consultation.

Manufacturer’s E&O in Canada: Getting the Right Coverage

When people buy a new product, they usually do so with the assumption that, if used as intended, the product will harm neither them nor their property. So when discussions arise regarding insurance and manufacturing, the primary concerns typically mentioned are the exposures related to the types and severity of bodily injury and property damage that can occur when products fail to function as intended. However, what is less often discussed is what happens when bodily injury or property damage does not occur, and instead the product fails to meet customers’ needs resulting in their financial loss. Since Commercial General Liability (CGL) coverage casts a wide net, such losses must be covered by CGL, right? Not necessarily.

Without an Errors & Omissions (E&O) policy, manufacturers may find themselves trying to navigate in the dark if a loss occurs they thought was covered by CGL. Simply put, there is no CGL coverage for their product or their work if it fails to perform its intended or warranted function when it does not cause any bodily injury and/or property damage. This is a very real risk for manufacturers of all shapes and sizes, and can have a significant impact on the stability and future success of their business if ignored.

Learn More About This Important Coverage

Manufacturers E&O insurance will cover both the customer’s financial loss and your defence costs. Most E&O policies are “claims-made policies,” which means that in order for the claim to be covered, both the work in question must be performed and the claim must be made during the policy period.

Contact Paul Christie team leader of PowerGuard Advantage, industry specialists helping service the energy and power sector with risk management and business consultation.

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