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Insurance implications of 3D printing

At a glance

  • Some industries are already using this evolving technology
  • As more adopt 3D printing, there will be insurable risks
  • Zurich is looking to properly define and identify all of the different risks

The hype and speculation around 3D printing is increasing with these machines now available on the high street, some for less than £1,000.

And with this evolving technology taking up more and more column inches in newspapers, it has not escaped the attention of the insurance industry where there have been whispers of potential claims ranging from product liability to long-tail employers’ liability. But the real associated perils of 3D printing — or additive manufacturing to give it its broader title — are yet to be fully defined.

3D printing risks Zurich are currently investigating:

  • Design and intellectual infringements
  • Quality of the raw materials
  • New combinations of raw materials that have not been tested
  • Product liability risks
  • Employee liability risks
  • Multi-jurisdictional risks where products are distributed worldwide

Assessing the risks

While the technology has actually been around for decades in high-end sectors, the mass market –beyond exhibitions – is generally only so far applying it to making replacement spare parts, such as dishwasher knobs, dimmer switches and bath plugs.

At upwards of £100,000, some of the higher-end machines are still prohibitively expensive and items can take hours or even days to print. Things get tricky, too, when it comes to composite products, because printing is generally done with just one material — either plastic or metal.

However, as 3D printing evolves, so will the risks. “This technology is one to keep an eye on,” said Kevin Rowe, Marketing Development Executive at Zurich, who is part of a global project team on emerging risks. “But if it’s on your risk radar now, so much the better for when its early teething problems are overcome.”

Zurich is currently investigating the different ways of carrying out additive manufacturing and assessing the associated risks at each stage, from manufacturing the product through to testing, distribution and the end user. For instance, some machines use higher levels of heat, some machines are bigger and some require more or less interaction with the operator. Then there are the insurance risks associated with the design and end use of the products.

3d printing

If you are a designer, for instance, you have no control over how well a 3D printing machine will make your product. There is also a risk with the quality of the raw materials being used and potentially new combinations of materials coming together, which have not been properly tested to do so.

Covering the risks

Product liability is also potentially a big issue in 3D printing to cover legal liability for damages, a claimant’s costs and your own costs for accidental injury or damage caused by products supplied. With an unorthodox supply chain, accountability and traceability might be harder so appropriate levels of professional indemnity cover would be needed too.

And due to potential design faults, product recall insurance would be warranted in the event that a self-printed product needed to be brought off the market, while the potential for intellectual property infringements would need careful exploration before taking an ‘original design’ off the printer.

Where printed products could easily be sold to foreign markets, worldwide cover may come in to play. There could also be an employer’s liability angle, as the raw materials used are sometimes powder based, so there is potential for respiratory issues for employees operating the machines.

Industries already involved

Kevin points to Formula One manufacturers and oil rig operators as examples of what he calls high-spec, high-end sectors that are already making a lot of customised parts. For most brokers, these are not exactly typical clients but Kevin added: “We do expect the high-volume market to come to the party, but just later, due to the massive set-up costs involved.”

This technology is one to keep an eye on. But if it’s on your risk radar now, so much the better for when its early teething problems are overcome.

Kevin Rowe, Marketing Development Executive at Zurich

Although 3D printing is not mass market yet, but when it is the retail sector may be the biggest beneficiary. Manufacturers, equally, might change their distribution models by providing access to their product ‘blue prints’ direct to the customer. A third area Zurich is investigating is the ‘arts and crafts’ sector, where designers could produce items such as jewellery out of basic materials like polymers in their own homes.

Earlier this year, Zurich published ‘SMEs and Risk in 2020,’ looking at new technologies that UK small businesses might be using in 2020, and this predicted that “one of the biggest potential growth areas is additive manufacturing or ‘3D printing’, due to its almost unlimited design possibilities and lack of waste”.

Mass take-up may be here sooner than we think.

Image © Getty

Leave a comment

Holly Markham

August 22nd, 2013 at 4:37pm

This is an incredibly interesting article, I started looking into the 3D Priniting Industry 6 months ago as I thought this would be an emerging trend of the future, with an ambition of creating a scheme to meet the inherent risks faced by 3D Printing Companies. I was informed that this was a waste of time, however it appears that I am heading in the right direction. It is important as an industry that we have the vision to be readily prepared for demographic change, digital technologies and emerging trends by providing products and services that will meet the demands of future business and markets. Lots of ideas, just need to implement and get them down on paper before I miss the boat! Thanks Zurich, always love reading your articles!