QBE Creates Three-in-One Manufacturing E&O Endorsement

PRODUCT: Manufacturing errors & omissions endorsement

COMPANY: QBE North America

BEST RATING: A (Excellent)

AVAILABILITY: Coverage is available through QBE partner agents and brokers.

FOCUS: An electrical wire manufacturer decides to alter the wire’s gauge design before selling 10,000 units to a high-quality amplifier manufacturer. The new design causes excessive static, resulting in a decline in sales and overall financial loss for the amplifier company, which sues the electrical wire company for brand damage and loss of income.

For product liability or commercial clients in similar scenarios, QBE North America now offers a new manufacturing errors & omissions endorsement as a standalone form that combines three key coverages—product, impaired property and work—in one form.

“It’s a robust coverage and fills several gaps in commercial general liability standard offerings to offer a more comprehensive general liability product to manufacturers,” says Walter Grote, senior vice president of commercial insurance at QBE North America.

The enhancement enriches the company’s core product niche in manufacturing and rounds out its broad commercial manufacturing offerings in property, liability, umbrella, workers compensation and aviation. While manufacturing E&O coverage is not a new product, Grote explains that its coverage offerings in the industry can be limited to loss of use to impaired property or property not physically injured.

By contrast, QBE’s new E&O standalone form, which insureds may add to QBE’s GL coverage, will pay for financial loss from a third party due to loss of use to the impaired property and to property not physically injured and from the insured’s work or product itself.

QBE’s new form will also protect the insured if they are found legally liable when another manufacturer sues them for financial loss due to loss of use of the insured product, such as when a product fails due to a design flaw or a new manufacturing process error.

“From an agent’s perspective, the product allows them to address and close a gap in product liability coverage,” Grote says. “It gives them a more comprehensive set of coverages and allows them to put all the coverages in one form—making it more valuable for both them and the client.”

UNDERWRITING: As an extension of QBE’s product liability offering, this endorsement is a claims-made coverage form that provides broad coverage on a simple rating basis.

Limits up to $1 million are available with multiple deductible options, and they include defense coverage. While each loss situation is unique, coverage includes damage to the client’s work, product and impaired property or property not physically injured. QBE requires a supplementary application and automatically includes a 90-day basic extended reporting period, with an optional five-year supplemental extended reporting period. The endorsement is available for insureds with a QBE GL policy that provides coverage for product liability.

MINIMUM PREMIUM: N/A.

TARGET: Midsize manufacturers with premiums between $100,000 and $1 million. Target manufacturing classes include, but are not limited to: metal stamping; bolts, nuts, screws, and rivets; molded plastic products; concrete pipe or concrete products; wood products; sheet metalwork; and household furnishings. Visit qbesolutions.com/manufacturing for additional information.

COVERAGE TERRITORY: All U.S. states.

CONTACT: Walter Grote, senior vice president of commercial lines; QBE North America, 88 Pine Street, New York, NY 10005; 212-422-1212.

Ronimarie Acord is an IA contributor.