Manufacturing drives economic development, fosters innovation, creates employment opportunities and enhances a country's competitiveness in the global market. Safe to say, manufacturers are the lifeblood of the economy and should be protected as such.

Manufacturing or distribution placements typically cover General Liability with Products Liability insurance. However, to fully protect their assets, it's recommended that manufacturing facilities also obtain coverage for Pollution Liability, along with Products Pollution and potentially other enhancements depending on their exposures.

Products Liability for Bodily Injury and Property Damage Claims

Basil Tsefrekas, RPS Environmental Practice Leader — Northeast Region, explains that agents working on manufacturing accounts typically look for General Liability insurance that includes Products Liability coverage.

"From beverage manufacturers to those making tanker trucks and everything in between, Products Liability insurance is critical in transferring risk," he says.

Products Liability insurance protects against losses from claims arising from manufacturing, distributing and selling products that cause harm or damage. Manufacturers face exposures when their products are alleged to have defects or issues that result in bodily injury, property damage or other losses.

Closing the Insurance Gap with Pollution Liability

However, General Liability insurance excludes pollution risks, leaving manufacturers with a significant gap. The addition of Pollution Liability and Products Pollution coverage helps close it.

"Manufacturers can face many pollution hazards, whether they know it or not," explains Tsefrekas. "A manufacturing facility may have on-site chemical storage and tanks that house fuel or chemicals used in its process, which could cause a significant pollution incident if released. These exposures are not covered under the facility's General Liability policy."

It's not only on-site pollution risks a manufacturer needs to be concerned about. For example, let's say a manufacturer produces an injection-molded barrel that houses some sort of chemical a client uses, and it fails. The manufacturing defect causes the barrel to fail and the chemical to spill, which requires environmental cleanup and remediation. In this case, Products Pollution coverage would typically respond. If there were no pollution incidents, then Products Liability coverage would typically be triggered for any bodily injury or property damage.

In another scenario, a valve on a truck driving down the highway opens and releases contaminated water. There may be a Products Liability claim against the valve manufacturer for the defect, but there may also be a pollution incident to address. That's where Products Pollution coverage steps in.

The Overlap of Products Pollution and Contractor's Pollution Liability

An overlapping exposure we often come across involves both Products Pollution and Contractor's Pollution Liability.

"For instance, a manufacturer of pumps also offers installation and servicing. In this case, the insured requires Products Liability on the manufacturing side if the pump fails and causes property damage or bodily injury. If the failed pump also contaminates the client's site, a pollution incident requires Products Pollution Liability coverage," says Tsefrekas. "In addition, if the manufacturer caused the pollution incident when installing the pump, Contractors Pollution Liability coverage would be required to address the claim."

Another example of potential mixed exposure would be an industrial floor-covering distributor that offers installation. There have been cases of newly installed office carpets causing employees to become nauseous from impacted indoor air quality. Materials can outgas, releasing volatile compounds into the air. If these volatile compounds come from the carpet material, it may trigger a Products Pollution claim. If it's determined to come from an adhesive used in installation, then Contractor Pollution Liability may be triggered.

Emerging Environmental Issues

The term "PFAS," also known as "forever chemicals," has made its way into the common vernacular and has caused recent changes in environmental regulation.

"We continue to see manufacturers concerned with their facility as well as being pulled into a potential products liability claim, and Products Pollution is the coverage form they will need to secure," emphasizes Tsefrekas.

There's a great deal of discussion about microplastics, their impact on the environment and their toxic effects on humans and animals. Microplastics are everywhere, from the water bottles we drink to the synthetic clothes we wear, creating a significant potential driver of pollution claims for manufacturers.

Another trend is turning recycled tires into artificial turf playing surfaces, indoor floor mats, playground elements and more, something Tsefrekas has his eye on.

"I believe we will start to see additional awareness and concern of these materials in our environment as a growing hot topic," he says.

As you work with manufacturing clients, a focus on thorough, 360-degree coverage and a watchful eye on future concerns are key to keeping clients' businesses humming along.

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