Commercial general liability, products liability, product recall and manufacturing errors and omissions do different jobs. The insurance contracts and facts determine which one may respond.
Customer-print and shop-designed work differ
A job shop may manufacture to a customer drawing, modify a specification or design its own product. Record who selected the metal, polymer, composite or other material, dimensions, tolerances, warnings and intended use. Working to a customer print changes the defence facts but does not prevent an allegation.
Manufacturer’s liability: bodily injury and property damage are not the only losses
Products liability commonly focuses on allegations that a product caused bodily injury or property damage, subject to the policy. A part that is merely out of tolerance can instead create rework, delay, loss of use or other financial loss. Manufacturing E&O may be relevant, but it is separate coverage and not automatically available.
End-use determines the consequence
The same component can carry a different exposure in ordinary industrial equipment, a vehicle, an aircraft, a medical device or a safety-critical system. Provide sales by end-use and identify load-bearing, pressure-containing, flight-critical, safety-related or regulated applications.
Contracts can expand the dispute
Customer contracts may require indemnity, defence, additional-insured status, waivers, specified limits, special jurisdictions or insurance that the existing policy does not provide. The broker checks the insurance requirements; legal counsel interprets the broader contract where appropriate.
Exports need separate attention
US and other foreign sales can affect which insurers will quote, pricing, jurisdiction and defence. Report direct and indirect exports where known, including parts sold to a Canadian customer that are incorporated into a product shipped elsewhere.
Recall costs are not automatically products liability
Locating products, notifying customers, removing, replacing, repairing, testing and disposing of affected goods can create costs without a third-party injury or damage claim. Product recall coverage, if available, has its own trigger, limits, conditions and exclusions.
Quality records support the factual story
Current drawings, material certificates, inspection results, calibration, lot traceability, non-conformance records and change approvals help show what was made and released. Do not claim certifications that the shop does not currently hold.
Prepare the products-liability discussion
Summarize products, materials, sales by end-use and territory, design responsibility, contract requirements, traceability, recall planning, prior defects or claims and requested limits. Do not share restricted customer information through the public form.
Common questions
How does working to a customer drawing affect liability?
It changes the responsibility and defence facts, although it does not prevent an allegation. Workmanship, raw material, dimensional checks, contracts, warnings, end-use and the insurance contract remain relevant.
What does product liability insurance mean for a machine shop?
It commonly concerns allegations that a machined or fabricated product caused third-party bodily injury or property damage, subject to the policy. Rework, delay, pure financial loss, recall and manufacturing errors and omissions are separate questions.
How does product recall differ from commercial general liability?
General liability commonly addresses allegations of third-party bodily injury or property damage. Product recall insurance, when purchased, addresses defined recall expenses under a separate contract.
What is the difference between CGL and product liability insurance?
They usually overlap rather than compete. Chubb Canada describes general liability as including products and completed operations liability, meaning a business’s liability to someone harmed by products it manufactured or sold. Products liability is therefore commonly part of a commercial general liability (CGL) policy; confirm how the products-completed operations limit and exclusions read in your own policy.
Does liability insurance pay to redo a defective part?
Not automatically. Liability insurance generally responds to injury or damage to others, while the cost of repairing or replacing your own defective product or work is often treated separately. Some insurers offer extensions for defective goods repair or replacement. A warranty you give a customer is your own promise, not insurance, so ask the broker how each cost would be treated.
What does product recall insurance cover?
Recall coverage addresses defined expenses of recalling products, such as locating, notifying, retrieving and replacing affected goods, which general liability does not usually pay. In Canada it may be available as a separate policy or as an extension from some insurers, subject to underwriting.
Why ask about US sales?
Territory and jurisdiction can affect which insurers will quote, pricing, terms and claims cost. Direct and known indirect exports should be disclosed.
Primary sources
Safety sources explain the operation, not whether insurance will pay a claim. Use the current insurance contract and its certificate or summary page when making a coverage decision.
- Insurance Bureau of Canada — liability and business coverage types
- Chubb Canada — general liability, including products and completed operations
- Northbridge Insurance — manufacturer extensions (defective goods, product recall expense)
- Chubb Canada — product recall insurance for component parts
- RIBO — product suitability
- RIBO — online conduct and content accuracy
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