At a glance
- Current product liability laws may not be suitable to deal with 3D printing
- New risks around design, traceability, product testing, piracy and long-tail liability claims for product failures
- Product liability one of biggest risks associated with emergence of 3D printing
Current product liability laws may well need to be reviewed and updated if the use of 3D printing continues to gather pace.
The whole distribution chain is likely to be turned on its head if 3D printing, which is being seen by some as the beginning of the third industrial revolution, takes hold and digitises the manufacturing process.
Although the technology is still very much in its formative stage and printing even a basic object can take minutes rather than seconds, the ability to translate a digital file into a 3D object may, one day, redefine the traditional shipping and warehousing methods. Equally, it could also increase the entities in the chain of liability and raise exposure risks.
Assessing the risks
The possibilities of 3D printing are endless, but the role of the manufacturer, designer, retailer and customer have yet to be fully defined in this new world and insurers themselves are still grappling with the shifting risks associated with 3D printing.
“Product liability is one of the biggest risks associated with the emergence of 3D printing,” said Alexander Young, part of the Product and Proposition Management team at Zurich.
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With 3D printing, the blame for a faulty product can either lie with the 3D modelling software, the 3D printer itself or even the operator of the 3D printer. Problems that can arise may stem from using unsuitable materials, as well as added complications with tracing the liability of a fault in a 3D-printed product.
And it is this liability – when does it start and when does it end, or if it ever does – that is troubling the insurance industry. With a 3D printer, almost any business or hobbyist can become a manufacturer overnight. Because of this, demarcation lines are likely to become blurred – especially around product liability.
“3D printing could completely change the relationship between manufacturers, sellers and customers, and the current product liability laws will need to be reviewed to ensure they are suitable,” said Alexander.
Janina Brown, part of the Research and Insight team at Zurich, added: “Understanding who is liable for what is one of the key challenges insurers will face as more and more customers adopt 3D printers and where liability falls will often be driven on a case by case basis.”
It may well be, though, that the buck stops with the manufacturers of the 3D printers and the software that runs them, especially around product liability claims stemming from 3D printing errors.
“If the manufacturers of the 3D printers advertise the capabilities of 3D printing, they could be held liable when the products don’t perform properly,” said Alexander. “While this risk is not nearly as serious as the risks to consumers using a faulty 3D-printed product, equipment manufacturers have been tied to liability cases such as these in the past. The costs for litigation defence are high, even if the printer equipment was used correctly.”
The burgeoning technology is likely to create an army of ‘bedroom manufacturers’ and existing legal frameworks may also need to be reviewed as new actors become involved in the whole manufacturing process.
“Tracing and proving liability between the retailer or hobbyist who printed and sold the product, the manufacturer of the machine which printed the product and the original digital designer of the product could prove difficult,” said Alexander.
The whole issue of pirated products is another grey area in terms of liability, especially if resultant sub-par products are made.
“Whilst copyright infringement principles apply to 3D printing just as they apply elsewhere, the lack of robust regulation and the inability to monitor what people 3D print will make it increasingly difficult to prevent individuals from creating counterfeit items,” said Janina.
“Design files could potentially be counterfeited, copied and shared on file-sharing sites in much the same way illegal copies of films and music currently is. Increased pirated products could lead to an increase in defective products being produced; and, as a result, a failure of downstream products with subsequent bodily injury and/or property damage.”
Alexander added: “The legal product manufacturers could be left facing litigation and product recalls for finished products or component products they did not manufacture.”
Understanding who is liable for what is one of the key challenges insurers will face as more and more customers adopt 3D printers and where liability falls will often be driven on a case by case basis
Janina Brown, Research & Insight at Zurich
Certain controls then, such as physical identifiers into the legal products or for only certified spare parts to be used, may have to be introduced to protect manufacturers from these potential claims.
Brave new world
As with most new technology, the risks can sometimes appear to outweigh the benefits at first. But that can soon change as the technology is either refined or legislation updated to cater for the technology.
Effective risk management can assist with 3D printing needs, and users of the technology should consider strategies for managing the imported product risk via more traceability of designs, raw materials and sourced components. Zurich currently offers risk management procedures to lessen the impact of supply chain disruption.
“In terms of 3D printing, the importance of having a risk management solution cannot be underestimated,” said Janina.
“Having an open dialogue between a risk manager from the insurance side and a product developer from the customer side will help identify the risk impact of using 3D printing within their business and put mitigating actions and contingency plans in place.”