Manufacturers’ E&O insurance self-audit checklist

3 minute read

Manufacturers’ Errors & Omissions (E&O) coverage can help you manage various types of loss scenarios. But how can you control your exposure and reduce the risk of being held liable?

We’ve created a self-audit checklist to help you measure of how effectively you have controlled your potential Manufacturers’ E & O exposure.

Management:

  • Has a Product Safety Committee or Manager been established or appointed?
  • Does it meet at regular intervals?
  • Does it review new products?
  • Are written records kept of its decisions?
  • Are records maintained for the life of the product?
  • Does it have the full authority necessary when potential problems are encountered?

Engineering:

  • Are design decisions recorded?
  • Are tests on models and prototypes recorded?
  • Are mandatory and voluntary standards in use?
  • Are products reviewed by a consultant?

Quality Control:

  • Does the department have a Quality Control Manual?
  • Is it actively used?
  • Is it updated and reviewed on a regular basis?
  • Are records maintained on all inspections?
  • Are records kept on vendors?
  • Are gauges and test equipment regularly calibrated?
  • Are customer complaints handled promptly?
  • Is corrective work documented?
  • Are defective products and parts segregated?
  • Have recall procedures been established?

Manufacturing:

  • Is the reliability of production machinery (lines) reviewed?
  • Is the reject rate on parts reviewed?
  • Is vendor performance evaluated?
  • Are production records maintained daily?

Marketing:

  • Are marketing personnel trained on how to sell the product?
  • Are advertising, sales brochures, manuals, warnings and labels periodically reviewed by the legal department?
  • Are customer complaints documented and conveyed to senior management?

Legal:

  • Has an action plan been established in case of a lawsuit?

Once you’re able to answer ‘yes’ to the questions outlined above, you’ll be well on your way to controlling your Manufacturers’ E & O exposure.

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