This article was produced in partnership with Amwins.
As the manufacturing sector undergoes rapid transformation, a new set of risks is reshaping the Errors & Omissions (E&O) landscape.
From artificial intelligence (AI)-driven production errors to cyber incidents and raw material shortages, wholesale and retail brokers are being challenged to respond with more comprehensive, tailored coverage solutions for the industry.
Experts from Amwins stressed that manufacturers today face more than traditional product liability exposures, and operational missteps can quickly translate into financial losses. Staying ahead of these trends will be critical for retail agents to advise clients effectively.
“E&O coverage has become essential for manufacturers,” said Charles Grodecki (pictured on the right), EVP with Amwins Brokerage in Charlotte, NC. “These businesses are exposed to risks that don’t always result in bodily injury or property damage but can still lead to substantial claims for financial loss.”
Megan North (pictured on the left), EVP with Amwins Brokerage in Seattle, WA, added that the pace and scale of AI adoption in this sector are opening doors to errors that might not have been considered as little as five years ago.
E&O insurance protects businesses from claims arising from mistakes, negligence, or failure to deliver promised services. For manufacturers, these risks often stem from the intersection of product performance, design responsibility, and contractual obligations.
These exposures are being compounded by advanced technologies such as generative AI, which is increasingly used to modernize product lines, enhance design, and optimize production. AI errors, such as flawed design outputs or unintended modifications, can lead to costly recalls, contract breaches, or operational downtime for manufacturing firms.
Labor challenges play a role in the adoption of AI tools. “While these technologies can help bridge the talent gap and improve efficiency, they also introduce the risk of production errors, delays and defective products, leading to financial losses and potential E&O claims,” said North.
At the same time, cyber risks are expanding as manufacturers adopt interconnected smart technologies. Although standalone cyber liability policies remain the gold standard for addressing data breaches and network security threats, some manufacturers’ E&O policies now include cyber liability provisions to protect against technology-driven operational failures and product defects, the Amwins executives noted.
Finally, global supply chain instability hugely impacts manufacturers’ ability to meet contractual obligations. Delivery delays or cost fluctuations in raw materials can trigger breach-of-contract claims.
“Some insurers now affirmatively cover raw material sourcing risks, recognizing their direct impact on a manufacturer’s bottom line,” said Grodecki.
At the same time, manufacturers are also navigating shifting tariffs, trade policies, and compliance mandates. These factors add a layer of uncertainty, particularly for firms that operate globally or in highly regulated industries such as automotive and electronics.
The manufacturers’ E&O market is evolving to meet these demands. At least two new carriers entered the segment in 2024, including a wholesale-only provider, according to Amwins.
“This increased capacity allows for more tailored solutions and competitive policy offerings,” said North. “Many new entrants are also explicitly focused on coverage enhancements, such as addressing technology failures and expanded supplier-related risks.”
For retail agents, this environment offers both opportunities and challenges. Understanding the intersection of emerging risks – AI, cyber, supply chains, and regulatory changes – will be essential to helping manufacturing clients navigate 2025 and beyond.
“With this type of market expansion and evolving policy forms, brokers who recognize the industry’s emerging risks and anticipate change will be best positioned to protect their clients,” said Grodecki.
Amwins offers the specialized expertise and market access needed to navigate this evolving space. With dedicated teams, Amwins brokers are well-equipped to help you meet your clients’ Manufacturing E&O needs.
Find out more about how Amwins can help you meet your clients’ changing expectations here.
