The emergence of 3D printing has been described as paving the way for a third industrial revolution. The technology enables small businesses and even individual consumers to make products that previously could only be built by large manufacturers. We consider some of the implications of this new technology for insurers, particularly in the realm of product liability.
3D printing is a process of making three dimensional solid objects from a digital file on a computer. The creation of a 3D printed object is achieved using software to slice a digital 3D model into layers. Additive processes are used to create the object by laying down successive layers of material such as plastic or metal until the entire model is created. Toys, shoes, jewellery, medical devices, cars, houses and even human tissue have been built using 3D printing.
For some time, manufacturers have used 3D printers in their design process to create prototypes for traditional manufacturing and research purposes. However, 3D printers are increasingly being used by consumers at home, with 3D printers available for purchase in UK retailers for well under £1000.
As more and more companies are utilising 3D printers, insurers need to understand how the technology is being used by their clients to ensure the most appropriate insurance cover is selected.
Liability for products made by 3D printing can potentially lie with one or more of several parties, including the designer of the original product, the designer of the software, the supplier of the raw material for the 3D printer, the manufacturer of the 3D printer, the company printing the 3D product, or the distributor. Thus, insurers need to assess the risks at any stage of the supply chain.
3D printed products could be defective for a multitude of reasons including a defective digital design, the use of inappropriate or hazardous printing materials, a defect with the printer itself, or human error in executing the digital design or using the 3D printer.
Other risks which must be considered by insurers include traceability issues. For example, it is very important to be able to trace the designs used. This can be challenging in light of the online platforms which exist for users to share designs which can be customised for printing. The traceability of raw materials and components is also very important. The potential complexity of the supply chains may make it harder to trace problems.
The ease with which personalised products can be made with 3D printing will also raise questions as to whether manufacturers will need to test each individual product or whether such items will be considered a mass product. Companies will need to ensure their quality control testing methods are robust and properly address the risks posed by 3D printing.
Careful consideration will need to be given to the need for product recall insurance, and worldwide coverage if an insured's 3D printed products are sold globally. It will also be necessary to review how the materials used in 3D printing perform over time, given the relative novelty of the technology to many of its current users and the fact that many of the finished products will have not been tested over the long term.
Note: Originally published in Australian Product Liability Reporter, June 2015, Volume 26 No 5