Mid-market insurance

Insurance for communication equipment manufacturers

Reviewed by the Apex broking team · Last reviewed 2026-11-06

Communication equipment manufacturer insurance is the programme protecting businesses that design, make or distribute radio, telecoms, networking and IoT communication hardware. It matters because a hardware fault or a bad firmware release can cause physical damage, network outages and recall costs across every installed unit.

Part of: IT and technology business insurance

In short

Makers of radios, routers, gateways, antennas, modems and IoT modules usually need products liability with territorial cover that matches their exports, product recall, technology PI for embedded software and firmware, and cyber that includes their update and device management infrastructure. Business interruption should reflect component concentration and long lead times. In Great Britain, radio products must meet the Radio Equipment Regulations 2017, and consumer connectable products have had to meet the PSTI security requirements since 29 April 2024. Underwriters focus on end uses, export territories, firmware release controls and supplier dependency.

What insurance does a communication equipment manufacturer need?

Communication equipment sits in an awkward place for insurers: it is physical hardware that can overheat, fail or interfere, but much of its value and risk lives in firmware and software. A programme that treats the business as a simple electronics maker can miss the financial loss that follows when a router update takes a customer's network down, or when devices in the field have to be patched, replaced or recalled.

The core is usually products liability, with careful attention to where products end up, plus technology errors and omissions for the software element and cyber that extends to your own update servers and device management platforms. Recall, business interruption, employers' liability and management liability complete the programme. If your customers are network operators, our page on telecoms and network infrastructure company insurance shows the contracts you are likely to be supplying into.

Main exposures and the cover that usually responds

Exposure	Cover that usually responds
Power supply or battery in a base station, gateway or handset accessory causes a fire	Products liability, subject to territory and the policy terms
Products sold into the US or Canada lead to a claim there	Products liability that specifically includes North America, often with different limits and conditions
Defect across a batch requires units to be withdrawn or replaced in the field	Product recall cover, bought separately
Firmware update bricks devices or causes a customer outage	Technology PI or E&O for financial loss; liability cover usually excludes pure financial loss
Signing keys or update server compromised, malicious code pushed to devices	Cyber for your own response costs; liability to customers depends on the cyber and PI wordings
Fire at a contract manufacturer or sole-source component supplier	Business interruption with a suppliers' extension; a general market shortage without damage is usually not covered
Test lab, RF chamber or production line damaged	Property, machinery breakdown and business interruption
Staff injury in production, test or field installation	Employers' liability, minimum £5 million
Shareholder, regulator or employment claims against directors	Management liability or D&O

Employers' liability is compulsory under the Employers' Liability (Compulsory Insurance) Regulations 1998, which set a minimum of £5 million for any one occurrence.

The regulatory framework

Radio equipment. The Radio Equipment Regulations 2017 apply to radio equipment placed on the GB market and cover safety, electromagnetic compatibility and efficient use of spectrum. Government guidance says manufacturers must keep technical documentation for ten years and that importers must put their name and a contact address on the equipment or, where that is not possible, on its packaging or an accompanying document. Ofcom enforces spectrum aspects and Trading Standards enforces the rest.
Connectable product security. Under the Product Security and Telecommunications Infrastructure Act 2022 and its 2023 regulations, consumer connectable products must ban universal default and easily guessable passwords, publish how to report security issues, and publish minimum security update periods. Manufacturers, importers and distributors all have duties, and the Office for Product Safety and Standards enforces the regime. Products sold only to businesses may fall outside it, so check each line.
Product liability. Under section 2 of the Consumer Protection Act 1987, the producer, an own-brander and the importer into the United Kingdom can each be liable for damage caused by a defective product.
Contracts. Operator and enterprise customers often require indemnities for intellectual property infringement, security vulnerabilities and service credits. Reasonableness of liability caps is assessed under section 11 of the Unfair Contract Terms Act 1977, which refers to how far it was open to a supplier to insure.

Illustrative examples

Illustrative example 1: a firmware release takes networks down

A manufacturer of business routers pushes a firmware update that causes repeated reboots under certain traffic patterns. Several managed service customers suffer outages and claim for service credits paid to their own clients. With no physical damage, technology PI is the policy most likely to be relevant, subject to any exclusions for contractual penalties.

Illustrative example 2: overheating outdoor units

A batch of outdoor radio units develops a power fault and one causes a fire on a rooftop. Products liability is likely to respond to the third party damage, while replacing the remaining units on every site is a recall question. See the product liability and recall toolkit.

Illustrative example 3: a sole-source chipset

A fire at the only qualified supplier of a chipset stops production for five months. Business interruption may respond if the supplier is covered by a suppliers' extension and the sub-limit and indemnity period are adequate. A shortage caused by global demand, with no damage, usually would not trigger cover.

What underwriters usually want to see

Product range and end uses, especially safety-critical, emergency services, aviation, marine, medical or defence applications.
Sales by territory and channel, with particular detail on the US and Canada.
Design and manufacturing split, contract manufacturers, factory audits and conformity assessment records.
Firmware development and release controls: code review, staged rollout, rollback capability and code signing key protection.
Vulnerability handling and security update commitments, including PSTI compliance for consumer lines.
Traceability by serial number and a written recall plan.
Key supplier dependencies, dual sourcing and stock buffers.
Standard terms, liability caps and the indemnities large customers ask for.

Common mistakes

Relying on products liability for a firmware failure that causes only financial loss.
Assuming exports through a distributor do not count as North American exposure.
Leaving code signing and update infrastructure out of the cyber submission.
Expecting business interruption to cover a market-wide component shortage.
Signing operator contracts with uncapped security indemnities without checking the insurance.

When to review your programme

You launch consumer connectable products, bringing in the PSTI regime and consumer claims. Our smart home and consumer tech brand page covers that model.
You begin selling directly or through distributors into North America. See PI and US exposure.
You move from selling hardware to offering managed connectivity or device management platforms. Cyber for manufacturers explains the overlap with operational technology.
An operator contract demands limits above your current programme, which excess layers for tech PI and cyber can address.
You take investment, acquire a business or prepare for sale, when D&O for manufacturers deserves a fresh look.

Our electronics manufacturers page covers the wider hardware exposures, the IT and technology business insurance hub covers the sector, and an insurance programme review checks product, PI and cyber cover together.

Apex arranges products liability, recall, technology PI and cyber programmes for communication equipment makers; a broker reads every enquiry.

Sources

Frequently asked

What insurance does a telecoms equipment manufacturer need?

Usually products liability with territorial cover matching where products are sold, product recall, technology PI for firmware and software, cyber, property and business interruption with supplier extensions, employers' liability and management liability. The balance depends on whether you design, manufacture, import or only distribute, and on the end uses of your products.

Does product liability insurance cover firmware bugs?

Only partly. Products liability usually responds where a defect causes injury or physical damage. A bug that bricks devices or causes outages, with only financial loss, is more commonly a technology PI or errors and omissions matter, subject to the policy terms and any contractual liability exclusions.

Does the PSTI Act apply to business networking equipment?

The PSTI security requirements apply to relevant consumer connectable products, so equipment sold only to businesses may fall outside the regime. Products that could be bought by consumers, such as home routers or smart hubs, are more likely to be in scope. Check each product line against the government guidance and exemptions.

Is a component shortage covered by business interruption insurance?

Usually only if the shortage follows insured physical damage at a supplier covered by a suppliers' extension, within the sub-limit and indemnity period. Shortages caused by market demand, export controls or a supplier's financial failure are generally outside standard business interruption cover.

Why do insurers ask about US and Canadian sales?

Product claims in North America can involve higher damages and defence costs and different legal procedures, so insurers price and word that exposure separately. Some policies exclude it unless declared. Disclose all routes, including sales through distributors and online marketplaces, so the policy matches where your products actually go.

Mid-sized business? Have your programme reviewed

Send us your current schedules or renewal pack and we will review the whole programme and tell you plainly what to keep and what to change. No fee and no obligation. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.