By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policyfor more information.

Industry Insights

Words of wisdom from our business insurance experts.

3D Printing Risks and Insurance Considerations

7 min read
May 23, 2022
3D Printing Risks and Insurance Considerations

The 3D printing industry, also known as stereolithography, dates back to when the world adopted the term technology for the first time. In fact, the first off-the-shelf machines capable of printing was patented in 1984, however, the Japanese are credited with with some of the first machines. Long before it was possible, peoples minds thinking about creating products automatically with machines. Over the past few years, software and hardware have developed enough to make everyone's dreams come true.

The health industry is fond of 3D printing because it can enrich the industry with cost-efficient yet quality prototypes. Although the 3D printing industry announces our future, recreating objects isn’t far from misusing the power to recreate weapons.

Still, many businessmen are devoted to prototyping or recreating certain items because they see a promising business idea, hence the fight for its legalization. In the meantime, businesses in the sphere of 3D printing identify several issues they face as owners.

3D printing businesses are generally dependent on a constantly evolving technology, with no proper coverage behind their backs while the cyber risks pile up by the day.

The Possible Risks For 3D Printing Business 

3D printing involves recreating any geometrical and asymmetrical shape in 3 dimensions, and the material used to recreate an object is controlled by a computer. 3D printing also appears as Additive Manufacturing. 

Although many industries are fond of 3D printers as they can recreate prototypes, there’s still a threat of misuse of the business for terrorist purposes. For that mere reason, the United States dispute the legalization of the business, and owners struggle to find suitable insurance for their already existing businesses.

In fact, owners find it crucial to have their businesses insured with an adequate coverage plan, as both the industry and technology for this business are constantly developing. Hence, the risks are continually piling up. The 3D Printing Industry, just like any other business sector, needs General Liability insurance, Workers' Compensation Liability, Commercial Property, Employee Practices Liability, and Cyber Coverage, to name a few. 

3D printing business owners demonstrate the need for 3D Printing Business Insurance Considerations through a few practical issues. Take a look below.

Problem: Undefined Cyber Liability Coverage Limits

Cyberattacks pose a severe threat to this industry as it's heavily dependent on the internet. It is so because hackers can easily erase all business data, alter information, breach employees' confidential information like transaction cards and business secrets, including client information, and cause financial leaks. These perils are only the tip of the iceberg.

Hackers can seamlessly unplug the entire company without leaving any trace of the action. Being without insurance, owners can only bid farewell to their company.

Solution: Detailed Cyber Insurance Program

Hackers have access to almost everything since the majority of the businesses are present online. Plus, the profit of most businesses remains online, so the cyberattacks pose a serious risk that any business owner takes on once they start their business. 

However, there is a solution that can solve these problems, and that's an all-encompassing, detailed cyber insurance plan that includes:

  • Reputation coverage;
  • Network interruption;
  • Contingent business interruption

According to experts, the issue with the insurance policies for the 3D printing industry lies in the exclusion of 'all loss' bodily or property damage. By adding this to the coverage plan, the insurants will be financially safe from any physical or property damage caused during a 3D printing malfunction.

Cyber Liability insurance doesn't cover spotting a company's reputation or any kind of business or network interruption damage during a work shift.

Problem: Management of Liability Risks

Due to the industry's downsides, 3D printing businesses are prone to being on the receiving end of legal issues addressed to the management of a company, like executives and directors. As much as 3D printing helps recreate essential tools like relevant medical instruments, it can also be misused to recreate weapons or other illegal items.

Nowadays, 3D printing insurance policies cover directors' and officers' coverage only, but business owners and executives most frequently ask for entity-level insurance.

Since the legalization of the 3D printing industry is currently in the gray, policy holders need to have extensive coverage for all the lawsuits, criminal proceedings, inspections, investigations, or any other legal or administrative action taking place at the property of a given 3D printing business against a member(s) of the management board. 

Solution: Close Analysis of the Coverage Plan

It's a no-brainer that 3D printing businesses fall into the category of emerging technology businesses; on the other hand, those businesses are offered only a limited selection of cyber attack insurance that doesn't always correspond with trending problems.

Experts advise that the best solution to this problem is to look for an experienced and well-informed broker who understands such industries' perils and can further direct you to find an updated and adequate coverage plan.

Also, always prepare a risk profile with previously estimated and predicted risks that your business can face, and that's the ultimate way to find a fitting insurance policy.

3D Printing Insurance Response to Liabilities

The insurance industry recognized the emerging problems that the 3D printing businesses face, but only a few insurance companies succeeded in creating appropriate coverage plans.

Essentially, some insurance policies offer coverage plans that involve profound risk and liability evaluation during recreating products, such as:

  • Design faults;
  • Accidents;
  • Injuries;
  • Respiratory problems

So, that's what the Employee and Product Liability insurance plans cover. However, there's the Intellectual Property coverage, which is crucial for 3D printing businesses because it covers:

  • R&D;
  • Design;
  • Patent;
  • Copyright issues;
  • Material matter;
  • Quality and testing

Intellectual Property coverage is the best protection against any legal lawsuit that might attract your business or product. Plus, always check if the packages offer Professional Indemnity coverage. Until the 3D printing business becomes legal, ensure you're fully protected because any company in the gray is an easy target to many.

3D Printing Business Insurance Costs

Any 3D printing business insurance costs vary from one provider to the other. Below is an overview of the most common policies and their corresponding prices:

  • General Liability & Product Liability: pricing depends on the products and annual sales - expect to pay at least $2,000 a year
  • Commercial Property: pricing depends on the replacement value of the property - expect to pay $1,000 per $100,000 of property
  • Cyber Liability & Data Breach: pricing depends on the annual sales and cyber security measure - expect to pay $2,000 to $5,000 per year
  • Workers Compensation: pricing depends on the annual payroll and types of workers - expect to pay at least $2,000 a year

Insurance is not a one-size-fits-all kind of thing. Premiums are based on numerous figures, so it's best to speak with an advisor about your business.

3D Printing Insurance: Should I Get It?

As the 3D printing industry depends on technology, it’s clear that advancements await since technology is rapidly shifting limits. 

However, while the legalization of the 3D printing business is still pending, it makes it easier for your competitors to cause damage to your business and eventually lead you to call it quits. 

Therefore, it's advisable for any 3D printing business owner to get their insurance policy as soon as possible, regardless of whether it is a small or big 3D printing business.

Tyler Crawford
by Tyler Crawford
Email AuthorLinkedIn Profile
Talk to a risk
management specialist
schedule consultation