What is Manufacturers E&O Insurance?


If clients feel that a manufactured product/component has failed its purpose or that manufacturers were negligent in performing services, they have the right to take legal actions.

Clients will likely sue the manufacturing company to claim their financial loss back from the manufacturers and compensation costs. This will result in the manufacturing paying a significant amount for legal costs, compensations cost, and more if the case is lost.

Manufacturers E&O is a focused professional liability insurance that covers a manufacturing mistake or negligent service that results in a third party financial loss (financial injury) without bodily injury or property damage.

What is covered?

Manufacturer E&O insurance covers financial damages that result from the following:

  • Poor quality or faulty products
  • Third-party errors and damages caused by material defect
  • Negligence or failure to deliver promised services

Manufacturers E&O insurance will cover both the customer’s financial loss and your legal costs.


What should you know?

Manufacturers errors and omissions coverage helps the manufacturing company avoid a significant financial loss and, at times, even bankruptcy, depending on the company’s finances. Therefore, errors & Omissions (E&O) insurance plays an essential part in protecting a manufacturer’s balance sheet.

Manufacturers E&O provides cover to manufacturers that may not be present in a General or Product Liability policy. Therefore, manufacturers E&O must be seen as an extension to the commercial general liability. Every manufacturing company should purchase the appropriate manufacturing E&O before signing a  business contract with clients.


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