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Manufacturing and supply
Manufacturers and suppliers need professional indemnity insurance if they design or formulate products to a customer’s requirements, specify products for a project, or give technical advice that customers rely on. If you only make or sell standard goods, products liability is your core cover. The gap is financial loss: products liability usually responds to injury and property damage, not to a product that works exactly as designed but was the wrong product for the job.
Part of: Professional indemnity insurance at Apex
In short
Products liability insurance responds mainly to injury and property damage. Under the Consumer Protection Act 1987, a producer isn’t liable for damage to the product itself, and property damage counts only for property intended for private use. When a customer’s loss is financial because your design, formulation, specification or advice was wrong, PI is usually the policy that responds. Advice also deepens contract liability: if a buyer relies on your skill and judgment for a stated purpose, the Sale of Goods Act implies the goods will be fit for it. Construction product suppliers face Building Safety Act claims for 15 years.
Last reviewed 5 October 2026 by the Apex professional indemnity team.
Products liability insurance, usually sold alongside public liability, pays when something you made or supplied injures someone or damages their property. It is essential cover, but it is built around injury and damage. It usually won’t pay to replace the product itself, to recall it, or for a customer’s financial loss when the product simply doesn’t do the job they bought it for.
The law points the same way. Under the Consumer Protection Act 1987, “damage” means death, personal injury or loss of or damage to property. A producer is not liable under the Act for damage to the product itself, and property damage only counts where the property was ordinarily intended for private use and the claimant intended it mainly for their own private use. Most business-to-business losses therefore sit outside the Act and are argued in contract and negligence instead.
Professional indemnity (PI) insurance usually covers that ground: liability for financial loss caused by negligent design, formulation, specification or advice. You are likely to need it if you:
The scenarios below are illustrative, not real claims. Each shows a loss that a products liability policy is unlikely to meet.
In none of these did the product injure anyone or damage other property. The claims are about design, formulation, selection and advice, and about money.
These are the main legal rules behind claims against manufacturers and suppliers. The Building Safety Act provisions apply to construction products.
| Law | What it says | Why it matters to you |
|---|---|---|
| Consumer Protection Act 1987, s.2 | Producers, own-branders and importers into the UK are liable for damage caused by a defective product. A supplier also becomes liable if, when asked, it fails to identify the producer or its own supplier. | Distributors and resellers are not outside the Act, so keep records of where products came from. |
| Consumer Protection Act 1987, s.5 | Damage means death, personal injury or loss of or damage to property. Damage to the product itself is excluded, and so is property not intended for private use. | Business customers’ financial losses fall outside the Act, and outside most products liability cover. |
| Sale of Goods Act 1979, s.14(3) | Where a business seller is told the particular purpose the goods are for, the goods must be reasonably fit for it, unless the buyer doesn’t rely, or it is unreasonable to rely, on the seller’s skill or judgment. | Technical advice increases reliance, and with it your contractual exposure. |
| Building Safety Act 2022, s.148 | Since 28 June 2022, a person who breaches a construction product requirement, makes a misleading statement when marketing or supplying a construction product, or manufactures an inherently defective one is liable if it causes a home to be unfit for habitation. Damages cover injury, property damage and economic loss, and contract terms excluding the liability are void. | Product literature, datasheets and sales statements can found a claim by people you never dealt with. |
| Building Safety Act 2022, s.149, and Limitation Act 1980, s.10B | Section 149 applies similar liability to cladding products for defaults before 28 June 2022. Section 148 claims can be brought for 15 years; section 149 claims that accrued before that date, for 30 years. | Past sales of cladding products can still produce claims, so run-off and historic records matter. |
For anyone who makes or supplies construction products, sections 148 and 149 of the Building Safety Act change the risk. Before 2022, a supplier’s exposure for its technical literature mostly ran to its own customer, under the contract. Now three kinds of conduct can lead to a claim:
If the product is then installed in a building and the conduct causes a home to be unfit for habitation, anyone with a legal or equitable interest in the building or a flat in it can claim: freeholders, leaseholders and later owners. They can recover economic loss as well as injury and damage, and you cannot contract out of the liability. Claims under section 148 can be brought for 15 years from completion of the building works; cladding claims under section 149 can reach back 30 years for rights that arose before 28 June 2022.
“Misleading statement” is where PI becomes central, because it is about what you said, not what you made. Datasheets, website claims, specification support and sales emails are all statements. Practical steps:
On the insurance side, check two exclusions. Many PI policies exclude claims arising from products you supply, and many exclude or sub-limit fire safety and cladding claims. A manufacturer’s PI wording needs both looked at; see fire safety and cladding exclusions in PI.
| Usually covered by PI | Often excluded or limited | Needs a different policy |
|---|---|---|
| Negligent product design and design-to-order work | Claims arising from goods you supply, unless the products exclusion is amended | Injury or property damage caused by your products (products liability) |
| Errors in formulation and specification advice | The cost of replacing, repairing or recalling your own product | Withdrawing or recalling products from the market (product recall cover) |
| Wrong calculations, product selection and technical advice | Fire safety and cladding-related claims | Injury to your own employees (employers’ liability) |
| Misstatements in technical literature, subject to the policy terms | Guarantees and fitness for purpose terms beyond reasonable care | Stock, plant and premises (property insurance) |
| Defence costs and expert evidence | Claims you knew about before the policy started | Goods damaged in transit (transit or cargo cover) |
The gap to watch is between the two policies. A products liability policy that excludes financial loss and a PI policy that excludes anything to do with products can leave a technical advice claim with nowhere to go. Manufacturers usually need a PI wording written for them, or a products policy extended to cover financial loss and efficacy, subject to the insurer’s acceptance and the terms. See professional indemnity vs product liability.
The limit usually follows your customers’ contracts. Supply agreements, framework contracts and specification work for main contractors often name a PI figure, sometimes on an each and every claim basis, and may ask you to keep cover for years after supply. Where nobody sets a figure, size the limit on a credible worst case: a customer’s redesign, lost production or remedial works on its largest project, plus legal costs.
PI is claims-made, so the policy in force when the claim is made is the one that responds. Product claims arrive long after the sale, and Building Safety Act claims can arrive 15 years after the works, or longer for historic cladding products. If you sell the business, stop manufacturing a line or close, arrange run-off for both PI and products liability: run-off for manufacturers.
A complete proposal gets better terms than a bare one, and a broker can only present what you tell us. Have these ready:
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PI for manufacturers and suppliers, placed by a named broker
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Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
If you design or formulate products, specify them for projects or give technical advice, yes. Products liability covers injury and property damage caused by your products, but usually not a customer’s financial loss when a product was designed, specified or recommended wrongly. PI covers that, subject to the policy terms.
No law requires manufacturers or suppliers to hold PI. Customers often do: supply agreements, framework contracts and specification work for contractors frequently name a PI limit, and construction clients may ask you to keep cover for years after supply.
Products liability responds to injury and property damage caused by goods you make or supply. PI usually responds to financial loss caused by negligent design, formulation, specification or advice. A product that fails to perform without hurting anyone or damaging other property usually falls to PI, if it falls anywhere.
It can. Customers rely on free advice given alongside a sale as much as on paid advice, and claims follow. Make sure your policy’s description of your business includes technical advice and specification support, whether or not you charge for it.
Not for Building Safety Act claims: section 148 makes any term that excludes or restricts that liability void. For other claims, contract terms can help, but they are not a substitute for insurance or for literature that matches your test evidence.
Usually not. The cost of withdrawing, replacing or recalling your own products is generally excluded from PI and needs separate recall cover. PI may respond to a customer’s financial loss claim if a negligent design caused it, subject to the policy terms.
Apex arranges professional indemnity insurance for manufacturers and suppliers across the UK. Tell us about your work and we’ll find cover that fits. Or call 0117 325 0027.
Start your PI proposal Call 0117 325 0027Apex 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. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
