Digital Health Technology Manufacturing Insurance: What UK Manufacturers Need to Know

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Digital Health Technology Manufacturing Insurance: What UK Manufacturers Need to Know

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Digital Health Technology Manufacturing Insurance: What UK Manufacturers Need to Know

Digital health technology manufacturing sits at the intersection of medtech, software, data, and regulated healthcare. Whether you produce wearable sensors, remote patient monitoring devices, diagnostic hardware, connected inhalers, smart implants, or the components that go inside them, your risk profile is different from a typical electronics manufacturer.

You’re dealing with patient safety, strict quality standards, complex supply chains, cyber exposure, and product liability that can escalate quickly. The right insurance programme isn’t just a box-tick for contracts—it’s a practical safety net that protects cashflow, reputation, and your ability to keep shipping.

This guide explains the key risks digital health manufacturers face and the core insurance covers to consider in the UK.

What counts as “digital health technology manufacturing”?

Digital health manufacturing can include:

  • Wearables and sensors (heart rate, ECG patches, glucose monitoring, fall detection)

  • Remote patient monitoring devices and hubs

  • Connected medical devices (IoT-enabled nebulisers, inhalers, pumps)

  • Diagnostic devices (point-of-care testing, imaging components)

  • Telehealth peripherals (cameras, otoscopes, digital stethoscopes)

  • Health data devices and gateways used in clinics and care settings

  • Contract manufacturing for medtech brands

  • Assembly, calibration, packaging, sterilisation, and labelling

  • Firmware and embedded software development (when tied to the manufactured product)

Many businesses in this space are “hybrids”: part manufacturer, part software provider, part service company. That’s why insurance needs to be structured carefully—so there are no gaps between product liability, professional indemnity, and cyber.

The biggest risks for digital health manufacturers

1) Product safety and patient harm

If a device fails, misreads data, or gives inaccurate outputs, it can lead to delayed treatment, incorrect dosing, or missed diagnoses. Even where the device is “non-invasive” or “low risk,” claims can still be severe because the end user is a patient.

Common triggers include:

  • Sensor drift or calibration errors

  • Battery failure or overheating

  • Firmware bugs causing incorrect readings

  • Manufacturing defects or poor quality control

  • Incorrect labelling or instructions for use

  • Component failure from a supplier

2) Regulatory and compliance exposure

Digital health devices often fall under medical device regulations. Even where a product is not classed as a medical device, you may still have obligations around safety, advertising claims, and data handling.

Compliance failures can lead to:

  • Product recalls

  • Withdrawal from market

  • Contract penalties

  • Increased scrutiny from customers and auditors

3) Cyber and data risks

Connected devices create a bigger attack surface. A cyber incident can affect not just your office IT, but also:

  • Device firmware and update pipelines

  • Cloud dashboards and patient portals

  • APIs used by healthcare providers

  • Manufacturing systems and production lines

A breach could expose patient data, disrupt services, or create safety issues if devices are compromised.

4) Supply chain disruption

Digital health manufacturing relies on specialised components (chips, sensors, medical-grade plastics, sterile packaging, adhesives, batteries). Delays or quality issues can halt production.

You may also face:

  • Single-source supplier risk

  • Long lead times

  • Customs delays

  • Contract manufacturing dependencies

5) Contractual liability and tender requirements

Hospitals, NHS suppliers, distributors, and larger medtech brands often require specific insurance limits and wording. Common requirements include:

  • Product liability with high limits

  • Professional indemnity (especially if you provide advice, design, or software)

  • Cyber insurance

  • Employers’ liability and public liability

  • Evidence of quality systems (e.g., ISO 13485)

If your policy doesn’t match contract wording, you can lose deals or face uninsured exposures.

Core insurance covers to consider

Most digital health manufacturers need a blended programme. The exact mix depends on what you make, where you sell, and whether you provide software/services.

1) Product Liability Insurance

What it covers: Claims that your product caused injury or property damage. For digital health, this can include allegations that a device malfunction led to harm.

Why it matters: Product liability is often the foundation of a digital health manufacturing insurance programme. Claims can involve patients, healthcare providers, distributors, and regulators.

Key points to check:

  • Territorial limits (UK only vs worldwide)

  • USA/Canada exposure (often increases premium and underwriting scrutiny)

  • “Medical devices” acceptance and classification

  • Cover for design defects vs manufacturing defects

  • “Failure to warn” and labelling/instructions exposure

  • Contractual liability extensions where needed

2) Public Liability Insurance

What it covers: Injury or property damage to third parties arising from your premises or operations (not your product). Example: a visitor slips in your facility.

Why it matters: It’s frequently required for leases, site access, and customer audits.

3) Employers’ Liability Insurance (Compulsory in the UK)

If you employ staff, UK law typically requires employers’ liability insurance.

What it covers: Claims from employees who suffer injury or illness due to work.

Digital health manufacturing examples:

  • Repetitive strain injuries in assembly work

  • Exposure to chemicals/solvents/adhesives

  • Burns or injuries from equipment

  • Manual handling injuries

4) Professional Indemnity (PI) Insurance

Many digital health manufacturers also provide:

  • Design and development

  • Engineering consultancy

  • Software/firmware development

  • Integration support for healthcare providers

  • Training and implementation guidance

What PI covers: Claims arising from professional negligence, errors, or omissions—typically financial loss (and sometimes associated costs).

Why it matters: If your device output or software leads to a wrong decision, the claim may be framed as professional negligence rather than product liability.

Key points to check:

  • Does PI cover include technology/IT activities?

  • Any exclusions for “medical advice” (you should not be providing medical advice, but wording matters)

  • Retroactive date (important for claims-made policies)

  • Contractual liability and fitness for purpose clauses

5) Cyber Insurance

What it covers (typically):

  • Incident response (forensics, legal, PR)

  • Data breach costs and notification

  • Business interruption from cyber events

  • Ransomware and extortion support

  • Third-party liability for data/privacy claims

Why it matters: Digital health manufacturers often process sensitive data or enable data flows. Even if you don’t store patient data, your systems can still be attacked.

Key points to check:

  • Coverage for cloud services and outsourced providers

  • Coverage for operational technology (OT) / manufacturing systems

  • Third-party supplier failure or contingent business interruption

  • Minimum security requirements and warranties

6) Product Recall / Product Contamination Insurance

What it covers: Costs associated with recalling products from the market, including:

  • Notification and logistics

  • Disposal and replacement

  • Investigation and root cause analysis

  • Crisis management

Why it matters: A recall can be financially devastating even before liability claims begin.

Some policies also include “government recall” or “regulatory recall” triggers, which can be important in regulated sectors.

7) Commercial Combined / Business Insurance (Property + BI)

A commercial combined policy can include:

  • Buildings and contents (if you own/lease premises)

  • Stock, raw materials, and finished goods

  • Plant and machinery

  • Business interruption (BI) following insured damage

Why it matters: If a fire, flood, or major incident stops production, BI cover can protect revenue and help pay ongoing costs.

Digital health angle: Consider whether you need cover for:

  • Clean rooms

  • Specialist calibration equipment

  • Temperature-controlled storage

  • High-value components n### 8) Equipment Breakdown (Engineering Insurance)

Manufacturing relies on machinery and testing equipment. Equipment breakdown cover can help with:

  • Sudden and accidental mechanical/electrical breakdown

  • Repair/replacement costs

  • Optional business interruption from breakdown

9) Goods in Transit and Stock Throughput

If you ship devices, components, or prototypes, you may need:

  • Goods in transit (UK and/or international)

  • Marine cargo / stock throughput

This is especially relevant if you ship to distributors, hospitals, or overseas partners.

10) Directors’ & Officers’ (D&O) Insurance

If you have investors, a board, or rapid growth plans, D&O can protect directors and officers against claims alleging mismanagement.

Common triggers include:

  • Investor disputes

  • Employment practices allegations

  • Regulatory investigations n## Optional covers that can be highly relevant

Depending on your setup, consider:

  • Clinical trials insurance (if you sponsor or run trials)

  • Medical malpractice / healthcare liability (rare for manufacturers, but relevant if you deliver clinical services)

  • Intellectual property (IP) legal expenses

  • Legal expenses insurance (contract disputes, employment claims)

  • Key person insurance (for founder-led R&D businesses)

What insurers and brokers will ask you (and why)

Underwriters typically want to understand your risk controls. Expect questions such as:

  • What exactly do you manufacture and what is it used for?

  • Is it classed as a medical device? What classification?

  • Where do you sell (UK/EU/USA)?

  • Do you design the product or manufacture to someone else’s design?

  • What quality systems do you have (ISO 9001/ISO 13485)?

  • What testing and traceability do you have (batch numbers, serialisation)?

  • What is your complaints process and post-market surveillance?

  • Do you have a documented recall plan?

  • What cyber controls exist (MFA, patching, encryption, secure update process)?

  • Any past claims, incidents, or near misses?

The stronger your documentation and controls, the easier it is to secure competitive terms.

Common exclusions and gaps to watch for

Digital health manufacturing insurance can fail you if the wording doesn’t match your real-world operations. Watch for:

  • Exclusions for “medical devices” or “bodily injury” under PI

  • Cyber exclusions on liability policies (or vice versa)

  • Territorial limits that don’t match your sales footprint

  • “Contractual liability” limits that don’t meet customer requirements

  • Unclear treatment of software/firmware (product vs professional service)

  • Recall cover not included (or only triggered after injury occurs)

A good broker will help structure the programme so product liability, PI, and cyber work together.

How to reduce premiums (without reducing protection)

Insurers price risk based on controls and clarity. Practical steps that often help include:

  • Documented quality management system and audit trail

  • Strong supplier management and incoming inspection

  • Serialisation and traceability for components and finished products

  • Clear instructions for use and warnings

  • Robust change control for firmware/software

  • Secure update mechanisms and vulnerability management

  • Incident response and recall plans tested annually

  • Contract review process to avoid “fitness for purpose” traps

Even small improvements can make a meaningful difference to underwriting.

How to choose the right insurance limits

There’s no one-size-fits-all limit, but common drivers include:

  • Contract requirements (NHS suppliers, distributors, large corporates)

  • Patient exposure and severity potential

  • Geographic footprint (USA exposure often drives higher limits)

  • Volume of units shipped and revenue

Many businesses start with a baseline and increase limits as they win larger contracts.

Getting a quote: what to prepare

To speed up quoting and improve outcomes, prepare:

  • Product overview and intended use

  • Sales split by territory (UK/EU/USA/other)

  • Manufacturing process summary and key controls

  • Quality certifications and audit results

  • Claims history (even if nil)

  • Cyber security overview (especially for connected devices)

  • Copy of key customer contract insurance requirements

Final thoughts

Digital health technology manufacturing is a high-opportunity sector—but it comes with high-stakes risk. The right insurance programme should be built around your product, your regulatory environment, and your data/technology footprint.

If you manufacture connected devices, wearables, diagnostic equipment, or components used in patient care, it’s worth treating insurance as part of your commercial readiness. Done properly, it helps you win contracts, protect your balance sheet, and keep building.

Need Digital Health Technology Manufacturing Insurance?If you’d like a quote or want to sanity-check your current cover, speak to a specialist commercial insurance broker. You can also request a fast quote online or call to discuss your product, territories, and contract requirements.

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