Professional Indemnity FAQ

Manufacturer's Errors and Omissions

Why Commercial Manufacturer E&O Insurance?

Errors and Omissions (E&O) is an often under-considered exposure for Manufacturers, thinking “I won’t have a claim for that”. However, a rise in the cost of litigation due to product and service disputes is now forcing manufacturers to rethink their insurance requirements.

So why are we seeing an increase in lawsuits?

  • More and more customers are willing to sue long-established business partners for performance and service failure problems.
  • Increases in the average size and length of contracts raise the risk of litigation, which a performance or service failure ‘may be worth the fight’ and results in a large award.
  • As market competition continues to increase, there is a greater chance that marketing and sales pressures will invite over-promising of supplier capabilities.
  • Today, companies are crossing borders to conduct business, which brings a host of new exposures due to foreign laws and regulations.

If you have a client in the manufacturing and / or fabrication industry, take a look at these scenarios and ask yourself whether you have the proper insurance protection.

Defective Part

Damages: $1.6M       Defence and Investigation Expenses: $65,000

A metalworker designed and manufactured a part used in air compressors. The part allowed a slight leak to develop in the compressor, requiring the company to inspect and replace hundreds of compressors. The metalworker was sued for lost revenue due to the defective part.

Substandard Raw Material

Damages: $500,000       Defence and Investigation Expenses: $75,000

An injection moulder of food containers for dairy products erroneously used an inadequate grade of low-density polyethylene in the manufacturing of container lids. As a result, the lids failed to provide a snug seal when displayed or stored at low temperatures, making an entire shipment unacceptable for its intended use. The dairy company sued the mould manufacturer for lost revenue.

Faulty Packaging

Damages: $200,000       Defence and Investigation Expenses: $45,000

A plastics packaging company did not include a warning notice in one batch of headphones it packaged for a client. The batch could not be specifically identified and, therefore, all of the headphones had to be taken off the shelves. The packaging company was sued for lost revenue and expenses.

To learn more about Manufacturers Errors and Omissions coverage, please contact us.

Latest News

CPR joins Ausure

We would like to announce to all our Clients, Prospective Clients, Suppliers and Insurers, that Cooper Professional Risks Pty Ltd trading as CPR Insurance Services, will be leaving National Adviser Services Pty Ltd (NAS) and joining Ausure Pty Ltd as a Corporate Authorised Representative from 5 March 2018.

Fundamentally, there is no difference to you, except our Invoices will look a little different, and the Banking details will be in a different name and account number. Everything else at CPR stays the same.

There are a number of reasons we have made this decision, but the primary reason is for what we believe is best for our clients.

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Special offer to CPR Insurance clients

Employsure are providing a FREE Business Health Check to all our clients and gives you the opportunity to receive an analysis of the health and safety requirements in your workplace. Also. Employsure  will review your employment agreements as well as your wage rates helping you to avoid workplace claims.

Ordinarily this would cost you at least $1,250 but because you are a CPR Insurance client, it is free!

It involves the following review for you.

SAFECHECK

A specialist Work Health and Safety Consultant will visit your workplace and carry out:

A review of your business’ current work health and safety policies, procedures and systems to identify areas of concern or non-compliance

Following the review, you will receive a report summarising the findings and the health and safety

Status of your workplace

WAGE CHECK

A Wages Adviser will review your rates of pay and produce a Wage Check report.

The review will be conducted against the industrial instrument applicable

A report will be supplied advising if the wages are compliant and what steps to take to achieve compliance

CONTRACT REVIEW

A Document Consultant will review an employment agreement and provide recommendations.

The review will highlight compliance issues with the Fair Work Act 2009 as well as best practice

The report will make recommendations to achieve compliance and provide protection to your business.

This will remove any areas of potential dispute and risk

So what do you have to lose? Contact us on 07 3123 1137 and arrange 

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