ALP: The premiums for our products liability insurance coverage are too high. How can we effectively negotiate with the carrier to reduce them?

November 2004

The best way to guarantee reduced premiums is to prevent accidents from happening in the first place. An effective preventive product safety program will reduce the number of problematic products leaving your manufacturing facility and, subsequently, reduce the number of accidents that occur with your products.

Some of the components of a basic preventive product safety program include:

Product Safety Audit: Qualified safety and legal personnel review the company’s claims history, product literature, warnings, standards compliance and hazard analysis for areas that may need improvement.

Corporate Safety Policy: This policy should establish ambitious yet achievable goals for product safety. The policy can be used to encourage a corporate culture that values safety. If genuine, that culture will permeate and bolster a successful products liability defense.

Product Safety Committee: This committee – which is, ideally, chaired by a trained safety professional, and staffed by members from all areas of the company – is the lightening rod for all product safety issues company-wide. The product safety committee will establish and oversee processes to insure product safety during all phases of the product’s life – development, design, manufacture, marketing, sale and use.

In the end, an effective preventive produce safety program will not only reduce your insurance premiums, it will result in savings of time and money previously spent on claims and litigation while preserving your company’s reputation for producing safe products.