Service Contracts: Manufacturers Vs. Insurance Companies

Extract

First, the OEM is obligated to service contract customers first. Without a could go to the bottom of the list. This would not be all that different with a third party firm—although they might try a little harder to be timely. With service contracts, payment has been made up front (or at least committed up front) for a entire year. This is guaranteed income and includes a guaranteed liability (for the OEM) “to maintain the instrument/system to its original specifications”. Service organizations must and do take this responsibility seriously. This liability doesn't exist with biliable customers, and work will be done to the best of the OEM's ability and only to the limit of the specific purchase order.