Insurance for deeptech and hardware startups

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-06

If you're building something physical — a sensor, a battery, a robot, a medical device, a piece of lab hardware — your insurance question is genuinely different from the one a SaaS founder is asking. You have a supply chain, a workshop or lab, prototypes that can fail in expensive ways, and intellectual property that may be the single most valuable thing on your balance sheet. You also raise money against milestones that involve building and shipping atoms, not just code. That changes both what can go wrong and what your investors will expect you to have in place.

This guide maps the risk profile of a deeptech and hardware business and the covers that matter as you scale through funding. It's written for founders who want to understand the shape of the problem before they talk to anyone — so the conversation you do have is a good one.

What makes deeptech and hardware risk different?

Software companies mostly worry about their advice, their code, and their data. You worry about all of that plus a physical object that leaves your control and does something in the real world. That widens your exposure in a few concrete ways.

• Your product can cause physical harm or damage. A device that overheats, a component that fails, a mechanical part that injures someone — these are bodily-injury and property-damage claims, and they don't care that you're pre-revenue.
• You have an R&D environment. Labs, test rigs, prototypes and specialist equipment carry their own risks — fire, damage, theft, and the cost of losing months of work if a one-off build is destroyed.
• You often manufacture, or rely on someone who does. Contract manufacturers, suppliers and component sourcing introduce liability that flows back to you if a batch is defective.
• Your IP is patent-heavy and central. For a lot of deeptech, the patents are the company. Protecting and, where relevant, defending them is a real cost and a real risk.

None of this means insurance is complicated for the sake of it. It means the off-the-shelf "startup package" aimed at app companies frequently leaves gaps exactly where a hardware business is most exposed. That's the trap we spend a lot of time helping founders avoid.

Which covers actually matter for a hardware startup?

Here are the covers that do the heavy lifting for a deeptech or hardware business, and what each one is actually for.

Product liability. This is the one that separates you from your software peers. If your physical product injures someone or damages their property, product liability responds to the claim and the legal defence costs. Once you're shipping anything — even a small batch of pilot units or dev kits — this moves from "nice to have" to central. It's usually arranged alongside public liability, which covers third-party injury or damage arising from your operations more broadly (a visitor to your workshop, for example). You can read more on our product liability insurance explainer.

Professional indemnity (PI). Deeptech companies do a lot of engineering, consulting, integration and design work — and often sell that expertise or deliver against a specification. PI covers claims that your professional work, advice or design was negligent and caused a client a financial loss. If you take on development contracts, provide technical specifications, or deliver bespoke systems, a client or partner may also require you to hold it. Our PI guide goes deeper.

Property, equipment and R&D cover. Your lab, workshop, test equipment, prototypes and stock represent a lot of invested capital and, often, irreplaceable work. Property and contents cover, equipment cover (including specialist and portable kit), and stock cover protect against fire, theft, damage and similar events. If a single destroyed prototype would set you back months, this is where you look — and it's worth flagging high-value or one-off items specifically so they're properly reflected.

Directors' & officers' (D&O) insurance. D&O protects your directors personally against claims arising from how they run the company — from investors, employees, regulators or others. It is not a legal requirement. In practice it becomes relevant because investors commonly require it as a condition of investment, typically from Series A onwards, and it's often written into the term sheet. If you'd like the detail, see directors' & officers' insurance explained.

Employers' liability. Once you employ staff, employers' liability insurance is a legal requirement in the UK under the Employers' Liability (Compulsory Insurance) Act 1969, with only narrow exceptions. It covers claims from employees who are injured or made ill through their work — a genuine consideration in a lab or workshop environment. Failing to hold it when you should can carry penalties, so it's one to sort as soon as your first hire starts.

Larger or more complex risk? Speak directly to a director — call 0117 325 0027 or email info@apexinsurancebrokers.co.uk.

What about intellectual property and patents?

For patent-heavy deeptech, IP is both your moat and a source of risk. There are two sides to think about. The first is protecting your own patents and defending them if someone infringes. The second is the risk that a competitor accuses you of infringing theirs. Specialist IP insurance exists to help with the legal costs of pursuing or defending these disputes, and it can matter a great deal when your valuation rests on a patent portfolio.

IP cover is a specialist area, and the right structure depends heavily on your portfolio, your markets and your commercial strategy — so it's genuinely a conversation rather than a box to tick. It's also worth coordinating with your IP lawyers, because the insurance and the legal strategy need to point the same way. If patents are central to your story, raise it early with an Apex specialist so it's factored into your programme rather than bolted on later.

What insurance do I need at seed, Series A and Series B?

The honest answer is that your cover should track your risk, and your risk changes as you build, hire and ship. Here's how it typically evolves. Treat these as a starting framework, not a prescription — your actual profile depends on what you're building and how fast.

At seed. You're small, probably pre-revenue, and focused on R&D. The priorities are protecting the physical work you've invested in and covering your first legal obligations. That usually means equipment and R&D property cover for your lab or workshop, and — the moment you take on your first employee — employers' liability, which is legally required. If you're already doing paid development or consulting work, professional indemnity comes into view. Public and product liability start to matter as soon as anything physical reaches a customer, tester or pilot site.

At Series A. This is the stage where the picture fills out. You're likely shipping products or pilot units, so product liability becomes central rather than optional. Your team is growing, so employers' liability is firmly in place. And this is the point at which D&O commonly enters the conversation, because incoming institutional investors frequently require it as a condition of the round — often written into the term sheet. Getting D&O arranged around a raise is one of the most common reasons hardware founders call us, and the timing matters, so it's worth starting the conversation before the term sheet lands. Our insurance by funding stage guide covers the wider picture.

At Series B and beyond. Now you're scaling manufacturing, selling into larger customers and possibly entering new territories. Your limits typically need to rise to match bigger contracts and bigger balance-sheet exposure. Larger customers and partners often impose their own insurance requirements in contracts — minimum limits, specific covers, and sometimes named additional protections — so your programme needs to be able to meet those. Manufacturing and supply-chain risk, product recall considerations, and international exposure all deserve a proper look. If you're expanding into the US or shipping products across borders, the risk landscape shifts again and is worth reviewing deliberately.

A quick word on limits: figures like £1m, £5m or £10m of indemnity get mentioned a lot, and they're useful as illustrative options. But the right limit for you depends on your contracts, your customers and your exposure — it isn't a number you can pull off a shelf. We'd rather work it out with you than have you guess.

What drives the cost of cover for a deeptech business?

We won't quote you a price in an article, because any honest number depends entirely on your specifics. But it helps to understand the factors that move the premium, so nothing surprises you.

• What you make and how it's used. A consumer device carried into people's homes carries different exposure from a component sold into an industrial system.
• Where you sell. Exporting — particularly to the US — changes the liability picture and typically the cost.
• Your revenue, headcount and payroll. These scale several covers, especially liability and employers' liability.
• Your limits and the covers you choose. Higher limits and broader cover cost more; the aim is appropriate, not maximal.
• Your claims history and risk controls. Good testing, documentation and safety processes tell an insurer you manage risk well.

The value of a broker who knows this sector is that we present your business accurately and in its best light — so you're not paying for exposure you don't have, or discovering a gap after something has already gone wrong.

How Apex helps deeptech founders

We work with venture-backed and fast-scaling companies, and we understand the rhythm of building hardware against funding milestones. That means we can hold your hand through a round — getting D&O in place to satisfy a term sheet, making sure your product liability is ready before you ship, and adjusting your limits as your contracts get bigger — without drowning you in jargon or selling you cover you don't need. When something is genuinely a specialist or evolving area, we'll tell you that and bring in the right input rather than pretend it's settled.

The best time to talk to us is before you need to — before the raise closes, before the first units ship, before a big customer's contract lands on your desk with insurance clauses in it. A short conversation now saves a scramble later.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This article is general information, not advice on a specific policy or a recommendation to buy any product.