Product liability poses a unique risk—it is unpredictable, can involve large dollar amounts, and presents significant exposure from claims arising many years or decades after a product is produced or even removed from the marketplace. In addition, when claims arise after a manufacturer goes out of business, other parties in the supply chain, such as retailers, parts suppliers, and contractors, are at risk of becoming target defendants for product liability claims.
Milliman helps clients avoid being blindsided by liability claims and future exposures that aren’t fully assessed or reflected on the balance sheet. Our expertise covers a wide range of disciplines, including actuarial consulting, claims consulting, underwriting, predictive modelling, enterprise risk management, reinsurance, and legal.
Our clients rely on us to:
- Evaluate the exposure of insurance entities to ensure adequate reserves to cover future product liability claims.
- Assess operational controls and ensure compliance with best practices company-wide.
- Assist in due diligence involving mergers with (or acquisitions of) companies facing potential product liability exposure.
- Quantify the value of existing claims, including costs associated with settling claims, as well as the associated litigation costs.
- Quantify the cost of future claims based on a review of such factors as known exposures and existing claims, the average life span of the product, how often customers replace the product, and how much product has been manufactured.
- Provide an independent assessment of reserve figures, case reserves, and payment patterns.
- Provide assistance with managing loss reserves and unearned reserves.
- Evaluate the cost and desirability of commutation, novation, and buy back of existing policies.
- Keep them up-to-date on the next wave of potential exposures.
