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Electronics manufacturers insurance is a programme covering product liability, recall, financial loss, property, business interruption and cyber for firms making PCBs, components and devices. It matters because standard liability cover leaves the costliest electronics claims uninsured.
Part of: Manufacturing insurance
In short
Electronics manufacturers usually need product liability with territory and jurisdiction that match where products end up, including North America where relevant. Standard product liability commonly excludes recall, the cost of replacing the product and pure financial loss, so those are bought separately or as extensions. Firms that design boards or firmware may need PI or design cover. Property and business interruption should reflect long lead times for specialist machinery and dependence on single source suppliers. Cyber cover should be checked for production systems. A broker can help map these exposures against customer contracts.
An electronics manufacturer usually needs a programme built around four exposures: liability for what the product does once it leaves the factory, the cost of getting it back if it goes wrong, the value of stock, machinery and buildings, and the income that depends on a small number of suppliers and customers. Cyber and operational technology now sit alongside these rather than apart from them.
For a PCB assembler, a component maker or a business producing finished devices, the core lines are typically:
Our manufacturing insurance guide covers the wider programme. This page focuses on what is different for electronics.
Under section 2 of the Consumer Protection Act 1987, where a defect in a product causes damage, liability can fall on the producer, on anyone who puts their name or trade mark on the product, and on whoever imported it into the UK in the course of business. A supplier who cannot identify the producer or its own supplier when asked can also become liable. For contract manufacturers and own brand sellers this matters, because more than one party in the chain may be pursued for the same defect. Our explainer on manufacturer versus distributor liability sets out the distinction.
Claims under Part I of the Act are subject to a ten year longstop in section 11A of the Limitation Act 1980, running from the relevant time defined in the 1987 Act. Contract and negligence claims follow different rules, so long tail exposure is common for electronics that are built into vehicles, buildings or machinery. If a product line is discontinued or the business is sold, product liability run-off is worth reviewing.
A standard product liability policy commonly responds to injury and damage to third party property. It usually excludes the cost of replacing or repairing the product itself, the cost of recall, and pure financial loss where nothing is physically damaged. Many electronics claims fall into exactly those gaps.
| Cover | What it usually responds to | Points to check |
|---|---|---|
| Product liability | Injury or third party property damage caused by a defect | Territory, US and Canada jurisdiction, defence costs inside or outside the limit |
| Financial loss and design | Customer losses where the product fails to perform or is wrongly specified | Whether design, formula or specification advice is included; efficacy wording |
| Product recall | Costs of withdrawing, notifying, transporting and destroying products | Whether a regulator notice is required; customer recall costs; rectification |
| Property and BI | Damage to buildings, plant and stock, and resulting loss of gross profit | Indemnity period, lead times for specialist machinery, stock peaks |
| Supplier and customer extensions | Income lost because a named supplier or customer suffers damage | Named versus unnamed, overseas suppliers, sub-limits |
| Cyber | Ransomware, data breach and system outage, including production systems | OT and IIoT coverage, BI waiting period, dependent business interruption |
The difference between PI and product liability is often where electronics firms are exposed. If you design boards or firmware to a customer specification, or advise on component selection, the risk is closer to a professional one. A PI policy for manufacturers and suppliers or a financial loss extension may be needed.
The GOV.UK guidance on placing UKCA or CE marked products on the market confirms that, under the Product Safety and Metrology (Amendment) Regulations 2024, Great Britain continues to recognise CE marking alongside or in place of UKCA for many product regulations. The detail varies by sector and Northern Ireland has its own rules, so check the sector guidance for each product family rather than assuming.
For consumer connectable products, the product security regime has applied since 29 April 2024. Manufacturers, importers and distributors must comply, and the requirements include banning universal default and easily guessable passwords, publishing how to report security issues and publishing minimum security update periods. OPSS enforces. A compliance failure is not itself an insured event, but a recall, a customer claim or a regulatory investigation that follows may touch several policies.
Under regulation 9 of the General Product Safety Regulations 2005, a producer or distributor who knows a consumer product poses risks incompatible with the general safety requirement must notify an enforcement authority in writing without delay. Recall policies often tie cover to circumstances like this, so the wording deserves close reading. Our product recall scenario walks through a typical sequence.
Exporters and businesses with overseas subsidiaries should look at whether a global insurance programme with local policies is needed, particularly where customers or regulators expect admitted cover in their country.
These examples are illustrative and do not describe any real business or claim.
Example 1: a power supply fault. A contract assembler builds power supply boards for an equipment maker. A capacitor batch from a new supplier degrades early and several units overheat in customers' premises, damaging fittings. Product liability may respond to the property damage. The equipment maker's cost of replacing every unit in the field, and its claim against the assembler for that cost, are recall and financial loss issues that a standard liability policy usually excludes.
Example 2: a sensor that does not perform. A component maker supplies sensors specified for a temperature range. A firmware calibration error means readings drift, and the customer's production line rejects output for weeks. Nothing is physically damaged. Any cover is likely to depend on a financial loss, efficacy or PI wording.
Example 3: a line stoppage. Ransomware encrypts the server that schedules pick and place machines. Production stops for nine days. Whether this is covered depends on how the cyber policy treats operational technology. See our page on cyber for manufacturers with IIoT and OT.
Apex arranges insurance for electronics manufacturers; a broker reads every enquiry.
Usually not. Most product liability policies exclude the cost of withdrawing, recalling, repairing or replacing the product itself. Recall cover is normally bought separately or as a specific extension, and wordings differ on what triggers cover and which costs are included, such as notification, transport, destruction and a customer's own recall costs.
Possibly. If UK customers build your components into products that are exported, a claim could still be brought in the US or Canada. Insurers usually ask about the final destination of products, not just your direct customers. Failing to declare indirect North American exposure can leave a gap, subject to the policy terms.
It is cover, usually an extension or separate policy, for claims where a customer suffers a financial loss because your product fails to perform as intended, without causing injury or property damage. It is common for component makers and firms that design or specify products, as standard product liability usually excludes pure financial loss.
GOV.UK guidance says Great Britain continues to recognise CE marking alongside or in place of UKCA for many product regulations, under amendment regulations made in 2024. Sector rules differ, and medical devices and construction products have their own arrangements, so check the guidance for each product type.
It can, subject to the policy terms. Some cyber policies cover business interruption from attacks on operational technology and production systems; others limit cover to office IT or apply long waiting periods. Check how OT is defined, whether physical damage is excluded, and how the cyber and property policies interact.
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.
Book a programme review Get a quoteApex 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.
