LIU’s new OEM Manufacturer’s Liability Endorsement
Globally there is a growing trend toward companies outsourcing their manufacturing. Many of these companies will be large brand names who are particularly sensitive to any brand and reputation impacts resulting from a Defect or Accidental Contamination.
For OEM Manufacturers, in the event of a Defect or Accidental Contamination during the manufacturing or packaging of the product, there is the potential for substantial third party lost profits. Unfortunately there may be only very limited cover under either a client’s General Product Liability policy or Recall policies for these losses.
Stand-alone General Product Liability policies in the market limit the coverage provided to any property damage that occurs at the Insured premises, or to goods under their care, custody or control. This means that clients may not have adequate cover for the financial loss suffered by their customers as a result of a Defect or Accident Contamination.
Under most recall policies, third parties have very limited cover - they commonly may have Third Party Recall Costs – however any claim from a third party for their loss of profits is usually not covered.
LIU’s OEM Manufacturer’s Liability Endorsement looks to provide this cover that is often excluded from standard Product Liability and Recall policies.
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