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Manufacturing Distribution Commercial Insurance Case Study

Case Study: How This Commercial Insurance Consultant Spotted (and Fixed) a Massive Liability Issue for Their Manufacturing Distribution Client

How the Commercial Insurance Advisory Team at MB Davis Group Rectified a Liability Exclusion That Could Have Devastated Their Client

If your company isn’t sure whether a commercial insurance consultant is necessary or whether the return on investment is there, this is a must-read case study.

Case Study - How This Commercial Insurance Consultant

Get to Know the Client

MB Davis Group recently took on a new client in the manufacturing distribution space. The client offers a sophisticated product, which necessitates engineering, design, and distribution services. The client also offers advisory services around how to safely use and operate that product.

What Was the Problem in Their Existing Insurance Liability Program?

When MB Davis Group stepped in as the client’s commercial insurance advisory team, the client lead recognized on day one a significant problem in the existing liability program.

The client had an unusual manuscript exclusion for any claims arising from their advisory or professional services in connection with their product.

That meant, if they rented their products to a customer and gave advice on how to assemble and use that product—something they routinely did—they were not covered for claims from any accidents resulting from those advisory services.

If the client gave faulty advice, the company would not have been insured for any:

  • Property damage
  • Personal injury
  • Deaths

How did such a massive hole exist in their commercial insurance program?

One contributing factor was that the client had switched insurance brokers, and the new broker didn’t fully understand the client’s business. There was an incorrect assumption that the client was exclusively a manufacturer, when they were also involved in design, engineering, and advisory services. That assumption left this entire subset of their business uninsured and incredibly vulnerable.

There was an incorrect assumption that the client was exclusively a manufacturer, when they were also involved in design, engineering, and advisory services. That assumption left this entire subset of their business uninsured and incredibly vulnerable.

Luckily for the client, the product they provide is high quality and not prone to breaking or failing. MB Davis Group identified this unknown issue and alerted the client. It wasn’t brought to their attention on the heels of an incident and costly claim.

What Solution Did MB Davis Group Implement?

While the problem was quickly identified, it took a significant effort to get fixed.

Especially when insurance programs involve multiple components and policies, you need someone with a deep and vast knowledge of the commercial insurance landscape. That gives you the best opportunity to create an insurance system that truly protects you.

The difficulty of getting this liability exclusion rectified demonstrates why you need someone who understands:

  • Your entire business (to identify when there’s a problem in your commercial insurance)
  • How commercial insurance policies work together (to find a solution that fixes that problem)
  • The high-level commercial insurance policy landscape (to find the solution that protects you financially and offers the best terms at the most favorable price point)

What Were the Results of Working with a Commercial Insurance Consulting Firm?

Working with MB Davis Group, the client now has the right insurance program for their business.

They know:

  • They have a commercial insurance consultant who knows their business well—one who got to know their business before they got to know their insurance coverage.
  • They have an experienced, professional, expert commercial insurance consulting team looking holistically and continuously at their entire insurance program.
  • There won’t be any glaring holes in their commercial insurance package.
  • They won’t be financially vulnerable (or even crippled) in the event of unforeseen circumstances.
  • They are getting their comprehensive insurance package under the best possible conditions (favorable rates, premiums, and terms).
  • Their commercial insurance package is created in a proactive, forward-thinking way, accounting for short-term and long-term protection and minimizing the chance of unpleasant financial surprises.

Because the company can operate with more confidence in their commercial insurance package, they are able to pursue their business expansion plans. The client is looking to dramatically expand the current scope of their business, and with MB Davis Group acting as the insurance expert in their corner, they know all insurance-related concerns around that significant expansion will be considered, addressed, and accounted for.

Because they’re investing in a commercial insurance consultant, they can enjoy the benefits of scaling and diversifying while also knowing they’re doing it in the responsible, compliant, proactive, financially prudent way.

“The client’s expansion plans are going to involve additional insurance-related risks and considerations,” said Mitch Davis, founder of MB Davis Group. “Our mission is to get out ahead of all these additional exposures, providing our client with the expertise, know-how, and platform to achieve their expansion plans without increasing their financial vulnerability.”

Has Your Company Recently Expanded Its Services or Product Line? If So, Are You Confident Your Commercial Insurance Policy Still Fully Protects You?

All companies evolve and change over time, and those additions to products or services can have massive ramifications for your commercial insurance.

In those instances, the greatest fear is that you’ll discover a massive hole in your commercial insurance not when you’re assessing your program but when you go to make a claim and realize there’s a coverage gap.

If you want to better and more confidently understand your commercial insurance, as well as your company-specific risk exposure, set up a conversation with Mitch Davis today at no cost to you.

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