The Client and Its Challenge
With the tightening of the insurance market, this chemical company’s underwriters required a more thorough understanding of its product liability practices and procedures. At the same time, the client faced a product contamination incident and needed to recall materials from its business-to-business customers. It realized it needed a clear understanding of product liability programs, as well as a roadmap for improvements. With $2 billion in annual sales, this company produces and markets a wide range of chemical products including food additives and pharmaceutical intermediaries.

The Risk Consulting Solution
Managing product liability should be a multifaceted program, however companies too often focus primarily on pre-event issues, such as quality control, design and formulation, and production. Often, less attention is placed on other areas, including labeling and warning, marketing, sales, technical assistance, and the recall process. With the Marsh product risk assessment (PRA), the company had the tools to measure the company’s product liability strategies and compare them to industry best practices while also identifying and prioritizing opportunities for improvement. The process addressed each of the 15 elements that are required to effectively manage product-liability risks — everything from management policy and production to document management and the business processes for handling complaints, incidents, and claims.

Results
Using the PRA tools and process, Marsh analyzed the client’s strengths and weaknesses and measured the potential impact of any deficiencies. The analysis was used to prioritize next steps and identify which product-liability processes needed immediate attention. Additionally, the Marsh PRA tool helped the client better communicate the product liability strategy and process improvements to its underwriters—an important step in a tight insurance market. The client’s underwriters have been impressed with and strongly support the company’s proactive approach to its product- liability strategy.