Don’t Be Afraid To Ask To Be Named As Additional Insured

Do you think you are too small to ask your third party manufacturer or parts supplier to name you as an Additional Insured on their product liability policy? 

The fact is most legitimate businesses have anticipated this request and sees it as a minimum standard for good business practices.  It is common for most manufactures and suppliers to have a blanket vendors endorsement on their product liability insurance policy so they can name their clients as Additional Insured.

If your supplier or third party manufacture will not name you as Additional Insured on their product liability insurance policy and provide you with a Certificate of Insurance showing you as Additional Insured, you should consider this a “red flag” that your supplier or manufacture does not have a Product Liability Insurance Policy.

Remember, you are most likely buying the product based on the word or advertising of the supplier or manufacturer.  If they truly believe in the safety of their products or manufacturing process, they should not have any problem naming you as an Additional Insured on their Product Liability Insurance Policy.

If your manufacturer or supplier will not name you as Additional Insured, consider finding another manufacturer or supplier.

Understanding Strict Liability

Many of the prospects that contact me have a difficult time grasping the concept of Strict Liability and how it impacts their business and product liability insurance.

First of all, strict liability requires no burden of proof that negligence exists. It only has to be proven that the product was the approximate cause of the bodily injury or property damage and that the product defect was a result of a design defect, manufacturing defect, improper warning or improper instruction.   Secondly, when a plaintiff brings a product liability lawsuit, they are not required to make a choice between design defect, manufacturing defect or failure to warn defect and may elect to use all theories to support their case.

Prior to 1963, injured parties had the burden of proof that negligence existed in order to be compensated for their injuries.  After 1963, due to the Strict Liability doctrine, the costs of injuries shifted to those who market the products – the manufacture, wholesaler, distributor and retailers. 

Basically, the logic behind Strict Liability is that the manufacturers, distributors and retailers of a product that causes bodily injury or property damage are more responsible than the consumer that was injured or suffered a loss and are in a better position financially to accept the burden of making the consumer whole again.