In a tough economic climate, do not rely on the insurance coverage of your business partners to protect your assets or protect against third-party liability claims. Any member of the supply chain can be held responsible for its counterparts’ torts. A distributor, for example, may be liable for a claim filed against a supplier that has gone out of business.
Therefore, in order to protect your company, it is a wise long-term investment to expand your coverage limits. While it may be tempting to cut costs by limiting coverage, this decision could expose you to severe liabilities due to your supplier’s shortcomings. If you currently deal with foreign manufacturers – or if you’re considering outsourcing for the first time – talk to a professional about covering the associated risks.
