Manufacturer Reps – The importance of Products and E&O Insurance
Why do Manufacturer Reps need Products liability? As a Manufacturer’s Representative, you have exposure based on the products you sell. Lawsuits against you arising out of a product you sold would fall under products liability. If you only have general liability, without products coverage, your insurance won’t respond.
Now, ideally you have an indemnification agreement with your manufacturer saying that they will accept liability for claims involving their products. However, the manufacturer’s insurance may not respond if you are the only party named in the lawsuit. Or the manufacturer’s policy may defend the suit, but not cover the costs of your own defense.
This why products coverage is so important for manufacturers reps. At the very least, you want the peace of mind that your insurance will respond and tender the lawsuit to the manufacturer. Also remember, that the manufacturer’s insurance is going to do all it can to keep costs to a minimum. So if they can find a way to declining you coverage, they probably will.
Why is E&O insurance important?
E&O or Professional Liability provides coverage for claims arising out of the services you provide. So what happens if you are sued for loss of income because they think your sold them the wrong product or there was a delay in delivery? Or maybe a client simply unhappy with the product you sold them? If there hasn’t been property damage or bodily injury, your business policy or general liability will not respond. Your manufacturer’s policy would not protect you in this instance either.
An errors and omission policy (professional liability) would defend lawsuits that claim the professional services you provide are the cause of loss.