Additive manufacturing, also known as 3D Printing (3DP), is a rapidly developing and exciting technology and is having a significant impact on various industries, including the manufacturing sector. In fact, according to a PwC survey of U.S. manufacturers, two of three companies are already adopting 3DP in some way—from experimenting with the technology to making final products. The survey also cites that about half of U.S. manufacturers believe that it is “likely” or “very likely” that 3DP printing will be used for low-volume, highly specialized products over the next three to five years – and about one in five predict the technology will be used for after-market parts production.
What is 3DP? 3D Printing turns digital three-dimensional models into solid objects by building them up in successive layers. The methods used vary significantly, but all start with a computer-aided design (CAD) model or a digital scan. This is then processed by ‘slicing software’ that divides the object into thin cross-sections that are printed out, one on top of the other.
Early adopters of 3DP are finding that the technology reduces wasted material and enables production of parts that are often too difficult and complex to make through traditional manufacturing processes. In addition, the PwC survey indicates that 3DP also holds the potential for companies to rethink their approach to keeping inventory, especially low-volume, obsolete parts, that still need to be made available to customers. “Printed parts that are currently warehoused could potentially save manufacturers—especially those with globally diverse distribution systems—logistics costs and get products to customers faster,” according to PwC.
Moreover, in looking toward the future, 3DP’s potential seems poised to expand as new materials are developed as “inks” and printers advance to enable the printing of intelligent systems embedded with enhancements such as sensors, transistors, and microprocessors.
What type of exposures does 3DP present?
Intellectual property is one exposure that manufacturers and others that use 3DP will have to consider. There is also an increased product liability exposure for manufacturers, as they owe a duty of care in monitoring how a product performs. A recent article by Swiss Re on the subject cites “with products that are expected to have a long life cycle, it is important to see how the product is changing over time. It may not be possible to monitor the performance of a product in case of a 'democratization' of production – i.e., the product could be printed by a variety of different producers and is hard to track. This adds a new level of complexity to product liability exposures.” In addition, 3D Printing will enable manufacturers to produce personalized or customized products – which raises the question as to whether each individual product will need to be tested.
Additive manufacturing also opens up new avenues for cyber threats, including industrial espionage and attacks by hackers.
Looking at the potential manufacturing insurance implications and the policies affected, such as product liability and product recall, cyber liability, and others, will be important as 3DP goes mainstream. Moreover, new risk management strategies for supply chain and product safety are critically important with the growing popularity of 3D Printing and will continue to be as the industry further adapts this technology. RPS provides a portfolio of manufacturing insurance products and is committed to supporting the industry’s evolution and growth.