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John Scott Insurance Agency

Benefits of Product Liability Insurance

By | Commercial Insurance | No Comments

Your customers expect you to have safe and reliable products, and failing to meet these expectations can lead to huge financial losses. If one of your products harms a customer in any way, they can sue your business, leading to costly legal fees and settlements. These costs can easily reach six figures.

While you may do everything in your power to ensure your products are safe, mishaps can still occur without warning. That’s why, to protect against claims and ensure the longevity of your business, you need product liability insurance.

Product Liability Insurance includes:

Coverage for manufacturing or production flaws – One of the key features of product liability insurance is its coverage for manufacturing or production flaws that cause unsafe defects in the product.

Protection against design defects – Even after product testing and trial runs, potentially dangerous defects can still appear long after production. Product liability insurance can provide coverage for design errors that make goods unsafe for use by the public.

Response for packaging and warning issues – In the event that you fail to provide adequate defect warnings or instructions for using the product, your company can be sued. These claims arise when products are not properly labeled or have warning s that are not explanatory enough to reduce consumer risks while using the product Product liability insurance helps organization prepare for and litigate these types of claims.

Supplemental commercial general liability (CGL) coverage – Generally, there is limited product liability protection under a CGL policy, yet it may not be enough coverage to adequately protect your business.  Product liability policies work alongside CGL coverage, providing protection against losses caused by malfunctions or defects in your products.

Product liability is a complex exposure, and managing your risk can be a major undertaking – even if you have access to all the right resources.

To supplement your risk management strategies and address specific exposures, speak with one of our agents at Contractors Insurance Agency today.

 

Benefits of Fiduciary Liability Insurance

By | Commercial Insurance | No Comments

Offering employees a variety of benefit options, like pension plans, retirement accounts and health care coverage, while not required, is expected of today’s employers.

Organizations that provide these resources to their workforce often task an individual or group of individuals called fiduciaries to oversee the benefits plans. Fiduciaries may include employers, plan administrators, plan trustees, directors, officers and internal investment committees.

A fiduciary’s job is to select advisors and investments, minimize expenses and follow plan documents exactly.  Under the Employee Retirement Income Security Act (ERISA), fiduciaries must act in the interest of plan participants in order to avoid liability claims related to the denial of benefits, administrative error, improper advice, wrongful termination of a plan and similar allegations stemming from plan management.

In order for an organization to protect its fiduciaries, fiduciary liability insurance is critical and can provide policyholders with the following:

ERISA liability protection – Under ERISA, a fiduciary is any entity or person that is responsible for the management of benefits plans. Per ERISA requirements, these individuals can be held liable for any breach of duties, errors or omissions. Fiduciary liability insurance is designed to protect plan sponsors and their employees from fiduciary claims – claims that can easily reach six figures or more.

Protection from common fiduciary claims – A number of parties, including employees, the Department of Labor and the Pension Benefit Guaranty Corporation, can file fiduciary lawsuits. Claims can arise for a number of reasons, including administrative error, wrongful termination of a plan, improper advice and conflicts of interest. Fiduciary liability insurance can go a long way in protecting employers and plan administrators from these common claims.

Affordable Coverage – While the cost of fiduciary liability insurance can vary depending on an organizations’ assets and the number of plan participants, coverage is generally affordable. On average, fiduciary liability insurance plans range anywhere from $600 to $2600 per year depending on a company’s specific requirements.

Specialty protection not found in similar policies – Companies often wrongfully assume that employee benefits liability (EBL) or directors and officers (D&O) liability policies can provide protection for fiduciary claims. While EBL insurance can defend against claims of errors in plan administration, it provides no protection for more expensive and complex ERISA violations. D&O policies also typically exclude EBL and ERISA related claims, making fiduciary liability insurance a must.

Coverage beyond fidelity bonds – ERISA fidelity bonds are required by law and are meant to protect plans against losses related to acts of theft or fraud. While these bonds are critical if someone acting as a fiduciary deliberately defrauds or steals from a plan, they only protect employee benefits and not a fiduciary’s liability.  Specifically, fidelity bonds do not provide any form of payment for legal defenses or damages related to fiduciary claims, making finding the right policy crucial.

If you have any questions about Fiduciary Liability insurance please contact us at Contractors Insurance Agency and find out how we can help you.

 

 

 

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