What Is Manufacturers E&O Insurance, and Do You Need It if You Already Have Product Liability?

Manufacturing businesses in Illinois may face many risks, including product defects and service errors. While many manufacturers carry product liability insurance, some may not be aware of the importance of additional coverage offered by manufacturers errors and omissions (E&O) insurance.

Understanding Manufacturers E&O Insurance

E&O insurance, also known as professional liability insurance, is built to help cover claims related to mistakes or negligence in your professional services. For example, if a manufacturing error causes a client’s production line to halt, resulting in lost revenue, E&O insurance may help cover those losses.

How Is E&O Different From Product Liability Insurance?

Product liability insurance and manufacturers E&O insurance serve different purposes:

• Product liability insurance: May help cover claims of bodily injury or property damage caused by a defective product. This is essential if your products could potentially harm users or damage property.
• Manufacturers E&O insurance: May help cover claims of financial loss due to errors, omissions or negligence in your manufacturing services or processes, even when there is no physical harm.

In short, product liability responds to physical harm, while E&O addresses financial harm from professional mistakes.

Do Illinois Manufacturers Need Both Coverages?

Most Illinois manufacturers should strongly consider carrying both types of insurance. Product liability is often required by clients or contracts, but it does not cover every risk. E&O insurance can fill important gaps, especially when a mistake could cause a client’s financial loss without causing injury or property damage, such as if you miss a delivery deadline.

How Our Team Can Help

At Pitcher Insurance Agency, Inc., we’re here to help you assess your manufacturers insurance options. Contact us today.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.