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Manufacturers' Products Liability

In the aerospace industry, as in every other industry, manufacturers have a duty of care to prevent injury or damage arising as the result of a fault or failure of their products.

This applies to the manufacturers or distributors of any product that can be applied for use in the aerospace industry, including:

  • Air navigation equipment
  • Airframes
  • Airport ground equipment
  • Ancillary equipment
  • Engines
  • Major components
  • Sub-components

Willis has extensive experience of providing insurance and risk solutions to manufacturers in the aerospace industry. Our client base includes all types of manufacturers and in many cases aerospace products are only a part of the activities of the manufacturer. They will have extensive liability insurance programmes covering their entire production, but most of these programmes have a common exclusion of any product destined to be fitted to an aircraft, or used in connection with the aerospace industry.

Risk Factors
Aviation products can cause catastrophic accidents as the result of relatively minor failures, for example:

  • A faulty rubber diaphragm in a fuel pump caused loss of fuel to an engine, bringing down a light aircraft
  • A faulty rudder actuator caused loss of control and subsequent total loss of a B737
  • Faulty wiring near a fuel tank caused an explosion that resulted in the total loss of a B747.

Willis Solutions
It is Willis' job to assist in the identification of aerospace products - in many cases the final destination of a product is not necessarily clear - and arrange an aerospace products liability programme in the specialist market. This market is able to offer high limits of liability compared with other markets, because of the catastrophe exposure involved.

We can also assist with the identification and minimisation of risk exposures. For example onerous liabilities can be assumed under sale or lease contracts, and we can work with the manufacturers to ensure that they do not take on more liability than is equitable, and that what is taken on is insurable as far as it is possible to insure.

We can arrange seminars and workshops to work with the contract negotiators, and legal and insurance personnel of our client companies to assist in the recognition of these onerous liabilities and providing solutions for their avoidance or reduction.

It will also often be the case that insurance cover is required for completed aircraft or products during test flights and prior to delivery to the customer. Willis can arrange insurance for these assets whilst the manufacturer retains title. In many cases this will be for the aircraft itself, including flight risks. This is Manufacturers Hull insurance, and is generally incorporated within the overall manufacturer's aerospace insurance programme.

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