Electric Propulsion Research Facilities Manufacturing Insurance (UK): A Complete Guide

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Electric Propulsion Research Facilities Manufacturing Insurance (UK): A Complete Guide

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Electric Propulsion Research Facilities Manufacturing Insurance (UK): A Complete Guide

Introduction

Electric propulsion is moving fast in the UK—covering everything from aerospace electrification and eVTOL programmes to marine electrification, hydrogen-electric hybrids, and high-power motor/inverter development. If you run an electric propulsion research facility that also manufactures components (or builds prototypes and pilot runs), your risk profile is a blend of R&D lab exposures and manufacturing exposures.

That mix can confuse standard business insurance. You may have expensive test equipment, high-voltage systems, battery storage, hazardous materials, and contractual obligations to customers, universities, primes, and public bodies.

This guide explains what “electric propulsion research facilities manufacturing insurance” typically needs to cover in the UK, where claims often arise, and how to structure a sensible insurance programme.

What counts as an electric propulsion research facility (with manufacturing)?

You might be:

  • Designing and building electric motors, generators, and power electronics

  • Producing prototype battery modules, packs, or battery management systems (BMS)

  • Manufacturing inverters, converters, control units, and harnesses

  • Running environmental, vibration, EMC, thermal, and endurance testing

  • Operating dynos, thrust stands, propulsor rigs, or water test tanks

  • Building pilot production lines for validation and certification

  • Producing small-batch parts for trials, demonstrators, or early customers

Even if you describe your work as “research”, insurers often treat you as a manufacturer once you:

  • Make physical products (even prototypes)

  • Supply to third parties

  • Install or integrate into a customer’s system

  • Provide design sign-off, performance guarantees, or safety-critical advice

Why standard manufacturing insurance often isn’t enough

Electric propulsion R&D/manufacturing has some distinctive exposures:

  • High-voltage and high-current testing (arc flash, fire, equipment damage)

  • Thermal runaway risk from lithium-ion batteries and energy storage

  • Complex supply chains (semiconductors, magnets, cells) and long lead times

  • IP and contractual liability (NDAs, development milestones, liquidated damages)

  • Prototype uncertainty (failure modes not fully known)

  • Software and firmware risk (safety logic, torque control, battery algorithms)

  • EMC/EMI issues affecting other systems

  • Clean room or controlled environment requirements

  • Regulatory and standards pressure (HSE duties, electrical safety, UKCA/CE where applicable)

A good insurance programme recognises that you’re not just making “widgets”—you’re building and testing high-energy systems.

Core covers to consider

1) Commercial property (buildings, contents, plant & equipment)

Property insurance is the backbone for facilities with expensive kit.

Typical insured items include:

  • Buildings (owned) or tenant improvements (leased)

  • Lab and workshop contents

  • CNC machines, winding machines, impregnation systems

  • Environmental chambers, thermal test rigs

  • Dynos, thrust stands, torque sensors, load banks

  • HV power supplies, transformers, switchgear

  • Battery cyclers, formation equipment, BMS test benches

  • Tooling, jigs, fixtures, and calibration equipment

Key points to get right:

  • Sum insured accuracy: replacement cost, not book value

  • Specified items: list high-value rigs and bespoke equipment

  • Basis of settlement: new-for-old where possible

  • Electrical and mechanical breakdown: often needs adding (see below)

2) Business interruption (BI)

If a fire, flood, or major equipment loss stops testing or production, BI can be the difference between recovery and a long-term setback.

BI can cover:

  • Lost gross profit

  • Increased cost of working (e.g., hiring temporary test capacity)

  • Ongoing fixed costs (rent, salaries, finance)

For electric propulsion facilities, the indemnity period is crucial. Lead times for bespoke rigs, power electronics, and specialist calibration can be long. Many businesses need 12–24 months, sometimes more.

3) Employers’ liability (EL)

If you employ staff in the UK, EL is legally required (typically £5m minimum, often £10m).

Electric propulsion work adds extra considerations:

  • HV safety procedures and training

  • Battery handling and storage

  • Fume extraction and chemical exposure controls

  • Manual handling and machinery guarding

4) Public and products liability (PL/Products)

PL covers injury or property damage to third parties. Products liability covers injury or damage caused by products you supply.

For electric propulsion manufacturing, insurers will want clarity on:

  • What you manufacture (motors, inverters, packs, harnesses)

  • Whether products are safety-critical

  • Where products go (UK only vs export)

  • Whether you install, commission, or modify customer systems

  • Contractual terms (liability caps, warranties, indemnities)

If you supply prototypes, be upfront: prototype supply is common, but it must be declared.

5) Product recall / rectification

If a batch of components is found to be defective, you may face:

  • Recall costs

  • Replacement and rework

  • Customer notification

  • Logistics and disposal

Some policies cover “recall” (often triggered by safety risk). Others cover “product rectification” (fixing a defect before it causes injury/damage). This can be important where failures are discovered during field trials.

6) Professional indemnity (PI)

Many electric propulsion facilities provide design, consultancy, testing, certification support, or engineering sign-off. PI covers claims that your professional services caused a financial loss.

Examples:

  • A customer alleges your test report was wrong and they made costly decisions

  • Your design advice leads to a performance shortfall or compliance issue

  • A firmware control strategy causes instability and project delays

PI is often essential if you:

  • Provide design services alongside manufacturing

  • Produce test reports relied upon by third parties

  • Work under contract with liability for errors/omissions

7) Cyber insurance

R&D facilities are attractive targets: IP, CAD files, firmware repositories, supplier data, and customer contracts.

Cyber insurance can help with:

  • Incident response and forensics

  • Business interruption from cyber events

  • Data restoration

  • Ransomware negotiation support

  • Liability for data breaches

If you operate connected test rigs, remote monitoring, or OT/industrial control systems, cyber risk is not just “IT”—it can stop operations.

8) Engineering insurance / machinery breakdown

High-value test equipment can fail without a fire or flood.

Machinery breakdown can cover:

  • Sudden and unforeseen damage to plant

  • Control system failure

  • Electrical arcing events damaging equipment

This is especially relevant for:

  • Dynos and rotating machinery

  • HV power supplies and switchgear

  • Battery cyclers and formation lines

  • Environmental chambers

9) Stock, materials, and goods in transit

You may hold:

  • Battery cells and modules

  • Rare earth magnets

  • Semiconductors and power modules

  • Copper windings, resins, chemicals

  • High-value prototypes

Consider:

  • Stock limits and seasonal peaks

  • Temperature-controlled storage

  • Transit cover for shipments to test sites, customers, or partners

10) Contractors’ all risks / installation cover (if you install)

If you install equipment at customer sites (or do on-site commissioning), you may need:

  • Tools cover

  • On-site liability extensions

  • Contract works cover

  • Hired-in plant cover

Common claim scenarios (and what insurance should respond to)

Battery thermal event

A battery module under test goes into thermal runaway, damaging the chamber, cabling, and nearby equipment.

  • Property: damage to equipment and facility

  • Machinery breakdown: may apply depending on trigger/cause

  • BI: downtime while replacing kit and revalidating

High-voltage arc flash incident

An arc flash injures an engineer and damages switchgear.

  • EL: employee injury claim

  • Property: switchgear and equipment damage

  • BI: operational downtime

Prototype failure causes third-party damage

A prototype inverter fails in a customer demonstrator, damaging other components.

  • Products liability: third-party property damage

  • PI: if failure alleged to be design/service related

Test report error

A customer relies on your endurance test report; later they discover the test conditions were incorrect and the project is delayed.

  • PI: financial loss claim

Cyber incident locks design files and stops operations

Ransomware encrypts CAD and firmware repositories; production and testing halt.

  • Cyber: incident response, restoration, BI from cyber

Risk factors insurers will ask about

Expect underwriters to ask detailed questions. Being prepared helps pricing and reduces coverage gaps.

  • Nature of products: motors, packs, inverters, control systems

  • Prototype vs production volumes

  • Safety-critical applications (aerospace, marine, automotive)

  • Testing activities (HV, thermal, vibration, environmental)

  • Battery storage quantities and controls

  • Fire protection: alarms, sprinklers, compartmentation

  • Electrical safety: procedures, training, permits to work

  • Quality management: ISO 9001, traceability, calibration

  • Cyber controls: MFA, backups, segmentation, incident plan

  • Contracts: liability caps, warranties, indemnities

  • Subcontracting and outsourced manufacturing/testing

Managing the “research vs manufacturing” grey area

A common pitfall is describing the business as “research only” while you:

  • Manufacture prototypes

  • Supply components

  • Provide engineering sign-off

That mismatch can cause claim disputes. A better approach is to present your operations clearly:

  • R&D and design services (PI exposure)

  • Prototype/pilot manufacturing (products exposure)

  • Testing and validation services (PI + liability)

  • Any installation/commissioning (on-site exposure)

Clarity helps insurers structure cover correctly.

Policy wording areas to review carefully

Not all policies are equal. Ask your broker to walk you through key clauses, such as:

  • Definitions of “product” and “professional services”

  • Prototype and experimental work exclusions

  • Heat work, high-risk processes, and battery-related exclusions

  • Contractual liability and indemnity clauses

  • Work away and off-site testing

  • Design and manufacture split (PI vs products)

  • Cyber exclusions on property/BI (and how cyber policy fills the gap)

  • Sub-limits for machinery breakdown, transit, and stock

Practical steps to reduce premium and improve insurability

Insurers reward good risk management. Useful steps include:

  • Documented HV safety programme and training records

  • Battery storage controls (segregation, monitoring, fire-resistant cabinets)

  • Clear test procedures and incident reporting

  • Preventative maintenance and calibration schedules

  • Fire risk assessment updates and housekeeping standards

  • Segregation of high-risk testing areas

  • Strong quality control and traceability

  • Cyber basics: MFA, offline backups, patching, least privilege

These steps can also reduce downtime and protect your reputation.

How to choose limits (a practical approach)

Limits depend on your contracts, customer expectations, and worst-case scenarios.

  • Property: replacement cost of buildings, contents, and specified equipment

  • BI: realistic gross profit and a long enough indemnity period

  • PL/Products: often £2m–£10m+ depending on customers and sector

  • PI: driven by contract requirements; consider retroactive cover and run-off

  • Cyber: based on revenue, dependency on systems, and IP sensitivity

If you work with larger organisations, they may mandate minimum limits and specific clauses.

Frequently asked questions

Do we need products liability if we only supply prototypes?

Often yes. If a prototype causes injury or property damage, the claim can still be a products claim. Declare prototype supply and the intended use.

We do testing and issue reports—does that mean we need PI?

If customers rely on your advice, reports, or sign-off, PI is usually sensible. It covers financial loss claims that PL/Products typically won’t.

Does property insurance cover damage to test rigs from electrical failure?

Not always. Many property policies exclude breakdown-type events unless machinery breakdown is added.

What about working with lithium batteries—will insurers refuse?

Not necessarily, but they will expect robust controls: storage limits, segregation, monitoring, and fire protection. Present your risk management clearly.

Can we cover IP theft?

Cyber policies can help with incident costs and some liabilities, but “loss of value of IP” is often hard to insure. The best defence is strong cyber controls and contracts.

Conclusion: build an insurance programme that matches how you actually operate

Electric propulsion R&D facilities that manufacture prototypes or components sit at the intersection of lab risk, manufacturing risk, and professional services risk. The right insurance programme typically blends property + BI, EL, PL/products, PI, cyber, and machinery breakdown—built around your real processes, contracts, and testing activities.

If you want, share a quick outline of what you manufacture, whether you supply batteries/packs, and whether you install or commission at customer sites. I can then tailor a tighter “recommended cover checklist” and a short set of underwriter-ready questions you can use when requesting quotes.

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