As a manufacturer of hardware products, you face unique challenges and risks throughout the design, development, manufacturing, and assembling technology hardware products. A well-designed program of Technology Insurance coverage is vital to safeguard your company’s assets and longevity.
For example, your business faces these and other potential losses that your insurance will cover:
- A fire at your manufacturing plant can cause lengthy disruptions to research, development, and hardware production.
- You have loss exposure when a subcontractor you use produces a faulty product that causes loss of revenue and reputational damage.
- Equipment breakdown leads to production delays.
The array of insurance protection recommended for your hardware manufacturing business includes a mix of the typical policies necessary for every industry such as General Liability, Property Damage, Professional E&O Liability, Employment Practices Liability, Commercial Umbrella, Executive Protection Liability, Business Interruption, Cyber Liability, Workers Compensation, and more.
Additional and specific insurance coverages for hardware manufacturers to review and adapt as necessary include:
- Products Liability & Completed Operations
- Media Liability
- Network Security
- Network Business Interruption
- Electronic Data Processing
- R&D Property Damage
- Intellectual Property
- Privacy & Communications Liability
Like hardware manufacturing, the insurance necessary to cover it is involved and often requires overlaying unique options that modify standard procedures. That is, you will find standard insurance policies with provisions modified for your industry or business model. And you will also require specific coverage that is unique to your operation.
Hardware Manufacturers Have Unique Insurance Needs
Hardware manufacturers have special protection requirements from their E&O insurance when a contractual liability claim occurs—for example, the fabrication of products to meet a customer’s sole specifications. Should the customer believe the product does not meet its required specifications or that the manufacturer was negligent, they may file a lawsuit that forces the hardware maker to mount an expensive legal defense.
Manufacturing Batch Failure
Batch failure is another possible E&O risk for tech manufacturers with recurring customers who find the current product faulty or failing to operate as expected from past performance. Substandard production is a risk often stemming from a lack of strict adherence to quality control and monitoring in the manufacturing process, which opens the door to litigation.
Traditional Product Liability Excludes Risks for Hardware Manufacturers
While product liability insurance is often adequate coverage for mainstream businesses if their product fails, technology manufacturers need a particular type of insurance. That’s because their products and exposures related to the performance of their products are not covered by standard general liability, product liability, or an E&O policy.
Since most businesses rely on technology and the hardware necessary to incorporate it, breakdowns and interruptions can cause massive losses to their business if the hardware fails. In such instances, customers usually file claims and lawsuits against the hardware manufacturer to hold them accountable to pay for their losses.
Technology E&O Insurance Extends Unique Insurance Protection
Traditional liability policies exclude pure financial losses, which creates a demand for technology E&O insurance. An example is it will help to pay for monetary losses to your customers who lose crucial data, such as billing records, caused by your hardware experiencing unexpected failure. A tech E&O insurance policy sits atop standard policies and safeguards against claims otherwise paid out of pocket.
Complex Businesses Require State-of-the-Art Coverages
Managing a hardware manufacturing business is challenging on numerous levels, not the least of which is maintaining adequate insurance protection against multiple threats that can cripple or bankrupt it. That’s why having a skilled team of experienced insurance professionals is critical to have in place to help you identify and amply insure your business against potential threats.
At the Dickstein Agency, we offer decades of NJ Technology Insurance expertise with solutions for everything mentioned in this post including, Property and Business Interruption, Errors and Omissions, Cyber Liability, General Liability, Products Liability & Completed Operations, Intellectual Property, Privacy & Communications Liability, R&D Property, Employment Practices Liability, Commercial Umbrella, Workers Compensation, and more.
About Dickstein Associates Agency
Dickstein Associates Agency has distinguished itself as a leading provider of personal and business insurance in the tri-state area since 1965. We pride ourselves on being advocates for our clients and providing them with quality and affordable coverages. As Trusted Choice™ independent insurance agency, we partner with various national and regional carriers, allowing for flexible coverage for each client’s unique circumstances. For more information on how you can leverage all your insurance to work best for you, and how we can secure the best insurance in the marketplace suited to your specific needs and business objectives, contact us today at (800) 862-6662 or www.dicksteininsurance.com.
