Many years ago,I never thought much about it,always carried plenty of general liability,but no products. Had a big scare 5 years ago,added products liability to the policy,as I became concerned as to the way lawsuits are going. But each year it gets higher and higher and is really causing a strain on our expenses. In talking to my dealer friends it seems about 50/50.Some say it is impossible to afford it,others say they cannot risk being without it. Any thoughts?

ttt

doesnt the manufacturer handle that? or does it still filter down to the dealer?

wouldnt work in this day and age with out it, everyone is trying to sue over anything to get moeny for nothing, never had to use it but peice of mind.......priceless

I guess it's the piece of mind thing.All our manufacturers carry it of course and ideally they would be the one to take the brunt of the lawsuits,but if it turns out that we didn't tighten a bolt or overtightened a bolt, then it's on us. Only recently has the cost of products gotten so STAGGERING that I even consider taking a fresh look. I used to say I was just working for the bank,now it seems I'm working for the insurance company.

You should see how much product liability is to manufacture racing brake calipers.

Piece of cake, market is soft for tough products these days..

I have a machine tool repair business, I dont design or build equipment. I still carry Product liability ins. My agent, no actually the insurance company rep that visits me annually explained it. My product is my work, if my work were to fail, this is why I need the coverage. Also, if I had some kind of disastrous warranty claim that I could not handle, this is where thay come in. I pay around $20 per 1K gross total combined with liability, its not cheap, but can be with out it either... Funny that my customers that produce products, dont have the insurance, they say that they produced a part to specs and thats that, they only make component parts not a finished good. There is over a 50/50 chance that every boat has a few parts made by one of my customers...

Most of what your agent and you have said above is true, with the exception of every component being a finished good in some form and at minimum your part could have caused another part to fail and so on (contributory negligence). The only way I WOULD NOT carry insurance in your situation would be if the end user is adding you to their policy as a Vendor/Additional Insured along with a written Hold Harmless/Indemnification agreement. Your $20 rate per $1,000 is pretty high, but your sales might not be high enough to get you a better rate, so the carrier is looking for premium.

The problem I run into is that there's no way to afford the amount of insurance I'd need in a worst-case situation so I'd still lose everything after the insurance tapped out. I can't give every nickle of margin to the insurers. Trouble is, much of my competition runs completely uninsured so that's the price I compete against.