Manufacturing Industry .
Owners, board members and executives of manufacturing companies are exposed to a large number of risks. These include lawsuits from regulators, customers, vendors, competitors, employees and shareholders. The current economic downturns have led to an increase in employment related claims, and given the labour intensive nature of manufacturing, this can leave business, and in particular, its directors and senior staff personally liable for actions against them.
Directors and Senior staff must ensure the quality of the product and failure to do so can lead to them being personally sued by customers and pursued by licensing agents and regulators alike. Defence costs for these actions can be substantial, with Directors often not able to be personally indemnified by their business.
Often when a product recall occurs, the largest cost to the business can be not the recall itself, but the reputational damage making it difficult to attract customers. The financial damage to the business can attract further lawsuits from shareholders.
Health and Safety
Manufacturing has a minefield of legislation when it comes to Health and Safety and even the most carefully and well managed business can fall foul of the rules. This can be anything from an injured employee suing the Directors for damages to the Health and Safety Executive taking an action for the breach of legislation. Both these things can be extremely costly for a Director to defend, with them being personally financially liable.
No “one size fits all” solution
It will come as no surprise given the above, that it is imperative that great care and attention to detail is afforded when structuring your Directors and Officers insurance cover. This is because all the risks above, including that of reputational risk can be significantly reduced with a carefully structured policy. There are many different types of policy and the scope of coverage can vary greatly and will depend on the particular manufacturing and activity of the insured.
Each sector will have particular exposures and risks which have to be defined and quantified to ensure the policy provides the protection required when called upon. In addition to defining a policy correctly selecting the most appropriate insurance company can be of equal importance as they vary greatly in terms of what they charge and how they respond when a company faces a crisis.