Commercial service contracts

December 21, 2017
Warranty Week

The importance of extended warranties sold to commercial customers is steadily increasing, as measured by the percentage of revenue they represent for manufacturers, and by the amount of business they represent for insurance companies. And in response, industry leaders have launched a new trade association for commercial service contracts.

While most U.S. states have carefully constructed laws governing the sale and administration of service contracts and extended warranties aimed at consumers, there is little said about service contracts sold by one business to another business.

For manufacturers, commercial service contracts are growing in importance, as measured by the growing percentage of revenue they represent. But while the providers of consumer service contracts enjoy a set of laws that mostly exempt them from most insurance regulations, providers of commercial service contracts do not.

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