No experience with this at all but I would agree I would surely think he needs Product Liability.
You say he doesn't sell but with what you describe it sure sounds like he is selling the product. Unless I am miss reading this.
Someone comes to him and says I need "this item".
He then finds a manufacture to make "the item".
He pays the manufacture their cost.
He then charges the customer a price that includes his mark-up.
That sure sounds like a sale to me.
Does he collect the money up front? If so what happens if the ship sinks on while crossing the pond?
If you have paid the manufacture what if they don't have insurance or refuse to refund the money?
This sounds like a good time to find a Broker who specializes in these type risk.
You have manufacturing, international trade laws, customs issues, in transit exposure, product liability and the list goes on an on.
yeah, it got too confusing and too hard to explain the situation.
i explained the pirates situation lol and when does the liable of product transfer to who and etc... and how people always get sued for being part of manufacturing etc..
i said i am not specialized in this part so he should find another broker
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btw, just to research a bit more instead of a mark up on price, what if he charged a broker fee instead just to connect the client to his factory?
To start, they need Commercial General Liability from a carrier that will include both Products Liability and Blanket Additional Insureds for Vendors.
Unfortunately I've wasted a lot of time trying to place this kind of start-up over many years. Commercial carriers typically don't like small direct importers, and choose to classify them as manufacturers rather than wholesalers if they are the last line of defense in the US. The ability to place Products will depend on the nature of the product and how hazardous it is. One company in our office will consider a BOP but only if it is very low-hazard. If the product is considered difficult, you might end up in Surplus Lines for the CGL.
Some of these risks will skate by without it until the retailer forces them to carry coverage under contract, often requiring Vendors Liability as well.
