By Jude Sedliak, RPLU
Senior Vice President, Underwriting, Berkley Service Professionals, a Berkley Company
October 21, 2024
In today’s rapidly evolving technology landscape, the demand for products like computer chips, semiconductors, electric vehicle batteries and embedded software is skyrocketing. This surge presents significant opportunities for manufacturers, but it also introduces a range of professional liability exposures that many manufacturers may not fully understand. As brokers, it’s crucial to educate your clients about the importance of Manufacturers Errors and Omissions (E&O) insurance to safeguard their businesses against these risks.
Catalysts for Industry Growth
The manufacturing sector is experiencing unprecedented growth, driven by federal initiatives such as the Infrastructure Investment and Jobs Act (IIJA), the CHIPS Act, and the Inflation Reduction Act (IRA). According to Deloitte’s 2024 Manufacturing Industry Outlook*, investments in semiconductor and clean technology manufacturing have surged, with commitments nearly doubling in 2021 compared to 2019. Additionally, around 200 new clean technology manufacturing facilities have been announced since the IRA’s passage, representing an $88 billion investment.
Manufacturers are under pressure to accelerate product development and enhance delivery efficiency. However, in their pursuit of growth and efficiency, manufacturers may overlook the professional liability exposures that can arise during the manufacturing process.
Protecting the Client’s Business
While most manufacturers are aware of risks like property damage or bodily injury, they may be less familiar with the professional exposures related to negligence, defective products, design flaws, or quality control issues. This is where Manufacturers E&O insurance becomes indispensable. It protects companies from third-party financial losses and litigation resulting from alleged product or work defects.
