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If a manufacturer engages in fraud and is caught, they would (a) be subject to criminal penalties for insurance fraud and (b) it would become very difficult or
by cobbzilla 9y ago
If a manufacturer engages in fraud and is caught, they would (a) be subject to criminal penalties for insurance fraud and (b) it would become very difficult or expensive for them to acquire insurance in the future. These two negative consequences serve as a strong deterrence against fraud.
- heavenlyblue 9y agoWhat I mean is that the buyers of the products would be incentivised to damage the products (or even themselves) since the manufacturers are paying for their premiums.