Exhaust System Components Manufacturing Insurance (UK): A Practical Guide

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Exhaust System Components Manufacturing Insurance (UK): A Practical Guide

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Exhaust System Components Manufacturing Insurance (UK): A Practical Guide

Introduction

If you manufacture exhaust system components—whether that’s silencers and back boxes, pipes and flex sections, clamps and hangers, catalytic converter housings, DPF casings, sensors, gaskets or complete exhaust assemblies—you’re operating in a high-risk, high-scrutiny environment.

You’ve got heat, welding, cutting, presses and CNC machinery on one side, and strict customer requirements, traceability expectations and product safety obligations on the other. One small defect can lead to a rejected batch, a warranty spike, a vehicle off the road, or in the worst cases, a fire or injury allegation.

This guide explains the key insurance covers UK exhaust component manufacturers typically need, what insurers look for, where claims usually come from, and how to structure a policy that actually responds when something goes wrong.

What counts as “exhaust system components manufacturing” from an insurer’s perspective?

Insurers will usually class you as a metalworking/manufacturing risk, but they’ll want detail because the risk profile changes depending on what you make and how you make it.

Typical activities include:

  • Fabrication of mild steel, stainless steel, Inconel or aluminium exhaust parts

  • Welding (MIG/TIG/spot), brazing and cutting

  • Tube bending, forming, stamping and pressing

  • CNC machining of flanges, brackets and housings

  • Surface prep and finishing (shot blasting, polishing)

  • Coatings (powder coating, ceramic coating, heat-resistant paint)

  • Assembly and packing for OEM, Tier suppliers, motorsport, aftermarket or bespoke applications

  • Storage and handling of raw materials, gases, oils and packaging

The more you can explain your processes (and your controls), the easier it is to get competitive terms.

The core insurance covers most manufacturers need

1) Employers’ Liability (EL)

If you employ staff in the UK, EL is a legal requirement in most cases.

Why it matters in exhaust component manufacturing:

  • Hot work burns, eye injuries and fume exposure

  • Manual handling injuries (heavy stock, awkward assemblies)

  • Noise-induced hearing loss

  • Slips/trips around fabrication areas

  • Hand injuries from presses, rollers and cutting equipment

Typical limit: £10m (often standard).

2) Public Liability (PL)

PL covers injury to third parties or damage to third-party property arising from your business activities.

Common scenarios:

  • A visitor, contractor or delivery driver is injured on site

  • You damage a customer’s vehicle or equipment during on-site work

  • A fire spreads to neighbouring premises

Typical limits: £2m–£10m depending on contracts and site exposure.

3) Products Liability

This is the big one for exhaust component manufacturers. It covers injury or property damage caused by your products after they leave your control.

Examples of product-related allegations:

  • A weld failure leads to an exhaust detaching on the road and causing an accident

  • A heat shield or bracket fails and causes heat damage to surrounding components

  • A component contributes to a vehicle fire allegation

  • A sensor bung or fitting leaks, leading to fumes entering the cabin

Important nuance: products liability typically covers injury/property damage, not “your product doesn’t work” or “we had to rework a batch”. That’s where other covers (and careful wording) come in.

4) Product Recall and Rectification (where appropriate)

If you supply OEMs, Tier suppliers, fleets, or high-volume aftermarket distribution, recall exposure can be significant.

Recall/rectification cover can help with:

  • Notification and logistics

  • Collection and disposal

  • Replacement parts and reinstallation costs (depending on wording)

  • PR and crisis management (sometimes)

Key point: many policies exclude recall by default. If you need it, it must be specifically arranged.

5) Property (buildings, contents, stock)

Property insurance covers your premises (if you own them) and your contents/stock.

What insurers focus on:

  • Fire risk from hot work and dust/particulate

  • Storage of flammables (paints, solvents, aerosols)

  • Gas cylinders (acetylene, argon, CO2)

  • Electrical load from machinery

  • Housekeeping and waste management

Make sure sums insured reflect:

  • Replacement cost of machinery and tooling

  • Peak stock levels (raw materials and finished goods)

  • Any customer goods you hold

6) Business Interruption (BI)

BI covers loss of gross profit and increased cost of working following an insured event (often fire, flood, storm).

For manufacturers, BI is often more important than the property claim itself.

Why:

  • Lead times for specialist machinery can be long

  • Tooling and jigs may be bespoke

  • Customer contracts may have delivery penalties

  • You may need to outsource production temporarily

Key decisions:

  • Indemnity period (often 12–24 months; sometimes 36 for complex supply chains)

  • Basis of settlement (gross profit vs gross revenue)

  • Suppliers/customers extensions (contingent BI)

7) Machinery Breakdown / Engineering Insurance

Also called engineering inspection and breakdown cover.

It can cover:

  • Sudden and unforeseen breakdown of insured plant

  • Resulting damage and repair costs

  • Optional deterioration of stock (if relevant)

  • Optional BI from breakdown

This is particularly relevant if you rely on:

  • CNC machines

  • Presses and forming equipment

  • Compressors and extraction systems

  • Powder coating ovens/curing lines

8) Commercial Motor (if you have vehicles)

If you have vans or fleet vehicles for deliveries, collections or site visits, you’ll need a commercial motor policy.

Consider:

  • Carriage of goods and tools

  • Any drivers under 25 or with limited experience

  • Overnight parking and security

9) Goods in Transit

If you ship parts to customers, goods in transit can cover loss/damage while being transported.

Check:

  • Who is responsible under your Incoterms/terms of trade

  • Whether couriers’ standard liability is enough (often it isn’t)

  • High-value shipments (e.g., motorsport or OEM consignments)

10) Cyber Insurance

Manufacturers increasingly rely on CAD files, production scheduling, ERP systems and customer portals.

Cyber insurance can help with:

  • Ransomware and business interruption

  • Data breach response (including ICO notifications where applicable)

  • Liability claims

  • IT forensics and recovery

If you store customer specifications, drawings or vehicle data, cyber becomes more relevant.

Common claims and loss scenarios in exhaust component manufacturing

Insurers price risk based on what actually goes wrong. Typical claim drivers include:

  • Fire from hot work, poor segregation, or inadequate extraction

  • Welding and fabrication accidents leading to injury claims

  • Faulty batch allegations (weld porosity, incorrect material grade, dimensional tolerance issues)

  • Coating failures causing corrosion and premature failure complaints

  • Supplier issues (wrong steel grade or inconsistent tubing) leading to downstream defects

  • Theft of tools, copper/stainless stock, or finished assemblies

  • Water damage to stock and packaging

  • Machinery breakdown causing missed delivery deadlines

  • Product liability allegations after a vehicle incident

Even when you’ve done nothing wrong, you may still face legal costs to defend a claim—another reason to ensure liability covers include strong defence cost provisions.

What insurers will ask you (and why it affects price)

Expect questions such as:

  • What exactly do you manufacture (parts list, end use, volumes)?

  • Who are your customers (OEM/Tier/aftermarket/retail/motorsport)?

  • Do you export (US/Canada can change liability exposure)?

  • What quality standards do you follow (ISO 9001, IATF 16949)?

  • Do you have batch traceability and retention of records?

  • What testing do you do (pressure testing, fitment checks, weld inspection, NDT)?

  • Any heat treatment, coating, or chemical processes?

  • Any work on catalytic converters or emissions-related components?

  • Hot work controls: permits, fire watch, extinguishers, segregation

  • Premises protections: alarms, CCTV, sprinklers, fire doors, extraction maintenance

  • Claims history (including near misses)

The goal is to show you’re a controlled manufacturing risk, not a “make it and hope” operation.

Key exclusions and gaps to watch for

This is where many manufacturers get caught out.

“Workmanship” and “your product” exclusions

Liability policies often exclude:

  • The cost to repair/replace your own faulty product

  • Pure financial loss (no injury/property damage)

If your biggest fear is a rejected batch or rework costs, you may need:

  • Product rectification/recall

  • Contractual liability review

  • Specific extensions (where available)

Recall not included

Recall is commonly excluded unless added. If you supply high-volume customers, don’t assume it’s covered.

Heat work and flammable coatings

If you do powder coating, solvent-based paints, or store aerosols, ensure the insurer is aware. Non-disclosure can cause claim disputes.

Tooling and customers’ goods

If you hold customer tooling, dies, jigs or stock, you may need:

  • Customers’ goods extension

  • Tooling cover with agreed values

Contractual penalties and liquidated damages

BI and liability policies generally won’t cover contractual penalties unless specifically endorsed (and even then, it’s limited). If you have delivery penalty clauses, manage them contractually and operationally.

How to reduce risk (and often premiums)

Insurers respond well to practical controls. Examples:

  • Formal hot work permit system, with fire watch and post-work checks

  • Segregated welding bays and controlled storage of gas cylinders

  • Extraction and fume control, with documented maintenance

  • Machine guarding, lockout/tagout procedures, and training records

  • Quality management system (ISO 9001 / IATF 16949 where relevant)

  • Batch traceability, material certificates, and supplier approval process

  • Weld procedure specifications (WPS) and welder qualifications

  • Incoming inspection for tubing and critical materials

  • Final inspection checklists and dimensional control

  • Clear product labelling, fitting instructions and warnings

  • Secure yard and stock storage (especially stainless/copper)

  • Business continuity planning and alternative suppliers

These aren’t just “nice to have”—they can be the difference between getting cover at all, and getting it at a sensible price.

How to structure your insurance programme (practical checklist)

Before you renew or take out cover, pull together:

  • Turnover split by product type and customer type

  • Export split (UK/EU/Worldwide)

  • Maximum foreseeable loss for property and BI

  • Machinery list with replacement values

  • Details of coatings/finishes and any chemicals used

  • Quality certifications and testing regime

  • Copies of key contracts/terms of trade (especially liability clauses)

  • Claims history and what you changed afterwards

A broker can then approach insurers with a clean, confident presentation—often improving both price and coverage.

Frequently asked questions (FAQs)

Do I need product liability if I only supply other businesses?

Yes. B2B supply still carries product liability exposure. A claim can come from an OEM, a fleet operator, a workshop, or a member of the public affected by a failure.

Is product recall insurance worth it?

If you supply volume customers, have contractual recall obligations, or your parts are safety-critical, it can be worth considering. If you make low-volume bespoke parts, the cost/benefit may be different.

Will insurance cover a rejected batch?

Usually not under standard liability cover, unless the rejection is linked to injury or property damage. For rejected batches, look at rectification/recall options and tighten quality controls.

What about motorsport exhausts?

Motorsport can be a different risk class due to performance modifications and higher temperatures. Tell your insurer if you supply motorsport or modified vehicle markets.

Do I need cyber insurance as a manufacturer?

If your production relies on IT systems, or you store customer drawings/specs, cyber is increasingly relevant. Ransomware downtime can be as damaging as a fire.

Call to action

If you manufacture exhaust system components in the UK and want a policy that matches your real-world risks—fire and hot work, machinery breakdown, product liability exposure, and supply chain disruption—get in touch with Insure24.

We’ll help you:

  • Identify the covers you actually need

  • Present your risk properly to insurers

  • Avoid common exclusions and gaps

  • Build a programme that protects your cashflow and contracts

Call 0330 127 2333 or request a quote via insure24.co.uk.

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