ISO 13485 Certified Medical Device Factories: Manufacturing Insurance Guide (UK)

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ISO 13485 Certified Medical Device Factories: Manufacturing Insurance Guide (UK)

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ISO 13485 Certified Medical Device Factories: Manufacturing Insurance Guide (UK)

Introduction: ISO 13485 is a quality badge — not a risk shield

If you run an ISO 13485 certified medical device factory, you already know the stakes: patient safety, strict documentation, supplier control, traceability, and constant audit readiness. ISO 13485 helps you build a repeatable quality management system (QMS) that reduces defects and strengthens compliance.

But certification doesn’t remove risk. A single nonconforming batch, a supplier issue, a cleanroom shutdown, or a cyber incident can still trigger:

  • Product liability claims

  • Regulatory investigation and corrective actions

  • Product recall and replacement costs

  • Contract disputes with OEMs and distributors

  • Business interruption and cashflow pressure

That’s where manufacturing insurance comes in. The right insurance programme is designed to protect your balance sheet when something goes wrong — and to help you keep trading.

This guide explains the key covers ISO 13485 certified medical device factories typically need, how insurers underwrite the risk, and how to build a policy that matches your manufacturing reality.

What “ISO 13485 certified” means for insurance (and what it doesn’t)

Insurers generally like ISO 13485 because it signals:

  • Documented processes and change control

  • Stronger supplier qualification and monitoring

  • Traceability and batch/lot control

  • CAPA (Corrective and Preventive Action) discipline

  • Internal audits and management review

All of that can reduce frequency and severity of claims.

However, insurers still price for exposure. ISO 13485 does not automatically protect you from:

  • Design-related claims (especially if you also design or modify devices)

  • Human error, maintenance failures, or calibration drift

  • Contamination events in cleanrooms

  • Counterfeit or substandard components entering the supply chain

  • Cyber incidents affecting production systems or QMS records

  • Contractual liabilities you accept in supply agreements

In other words: ISO 13485 can improve your risk profile, but you still need comprehensive manufacturing insurance.

Who this blog is for

This article is relevant if you are:

  • A UK medical device manufacturer (own brand)

  • A contract manufacturer (CMO) producing for OEMs

  • A factory producing sterile or non-sterile devices

  • A manufacturer of components, sub-assemblies, or finished devices

  • A business operating under UKCA/CE marking requirements

If you also provide installation, servicing, calibration, or software updates, you may need additional covers (we’ll cover those too).

Core insurance covers for ISO 13485 certified medical device factories

1) Product liability insurance (and why limits matter)

Product liability is usually the cornerstone of a medical device manufacturing insurance programme. It responds when a third party alleges your product caused:

  • Bodily injury (e.g., patient harm)

  • Property damage

For medical devices, claims can be high severity. Even if you ultimately win, legal defence costs can be significant.

Key points to check:

  • Territory and jurisdiction: UK-only vs worldwide; US/Canada exposure is a major rating factor.

  • Limit of indemnity: Many factories carry £5m–£10m; some contracts demand more.

  • Claims-made vs occurrence: Many liability policies are occurrence-based; professional indemnity is often claims-made.

  • Definition of “product”: Ensure it includes components, sub-assemblies, and packaging where relevant.

  • Contractual liability: If your contracts include broad indemnities, you may need specific endorsements.

ISO 13485 angle: Strong traceability, CAPA, and complaint handling can help demonstrate you’re a “good risk” and may support better terms.

2) Public liability insurance

Public liability covers injury or property damage arising from your premises and operations (not the product itself). Examples:

  • A visitor slips in a corridor

  • A contractor damages a client’s equipment while on-site

For factories with frequent audits, supplier visits, and logistics activity, this is a standard requirement.

3) Employers’ liability (UK legal requirement)

If you employ staff in the UK, employers’ liability is typically required by law (with limited exemptions). It covers employee injury or illness arising from work.

In manufacturing environments, insurers will look closely at:

  • Manual handling

  • Machinery guarding and maintenance

  • COSHH controls for chemicals/solvents

  • Cleanroom protocols and PPE

  • Training records and incident reporting

4) Product recall / product contamination cover

Product recall insurance can cover costs associated with recalling products from the market. Depending on the wording, it may include:

  • Notification and communications

  • Shipping and disposal

  • Replacement or repair

  • Overtime and additional labour

  • Consultant costs

Some policies also address contamination or tampering events.

Important: Not all “recall” covers are equal. Some only respond to a recall mandated by a regulator; others can respond to voluntary recalls where there is a credible risk of harm.

ISO 13485 angle: Your recall procedure, traceability, and complaint handling process are central underwriting questions.

5) Professional indemnity (PI) / errors & omissions

If you do any of the following, PI becomes important:

  • Design or co-design devices

  • Provide technical advice to customers

  • Modify specifications under change control

  • Provide validation documentation or regulatory support

  • Provide software configuration or updates

PI responds to financial loss claims arising from professional services (not bodily injury/property damage). In medical device supply chains, a “paperwork” error can be expensive even without injury.

Common triggers:

  • Incorrect validation documentation

  • Misinterpretation of specifications

  • Failure to meet contractual performance requirements

  • Errors in labelling or instructions (where treated as professional services)

6) Manufacturing E&O / failure to perform (contractual risk)

Some factories face claims for:

  • Late delivery

  • Out-of-tolerance batches

  • Failure to meet yield or performance

These are often contractual and may be excluded under standard liability policies. Specialist manufacturing E&O or tailored endorsements can help, depending on the risk and market appetite.

7) Property insurance: buildings, contents, and stock

Property insurance covers physical loss or damage to:

  • Buildings

  • Plant and machinery

  • Cleanroom infrastructure

  • Tools and equipment n- Stock and materials

Medical device factories often have high-value equipment (CNC, injection moulding, sterilisation equipment, test rigs, metrology tools) and sensitive environments.

Key underwriting details:

  • Fire protection (alarms, sprinklers, compartmentation)

  • Hot works controls

  • Electrical inspections and maintenance

  • Cleanroom HVAC and filtration maintenance

  • Storage of flammables and chemicals

8) Business interruption (BI)

Business interruption covers loss of gross profit (or revenue) following an insured property damage event.

For ISO 13485 factories, BI can be critical because:

  • Revalidation after repairs can take time

  • Lead times for specialist equipment are long

  • Customer contracts may penalise delays

Watch-outs:

  • Indemnity period: 12 months may be too short; many manufacturers need 18–24 months.

  • Basis of settlement: Gross profit vs revenue; ensure it matches your accounts.

  • Increased cost of working: Covers extra spend to keep operating (e.g., outsourcing production).

9) Machinery breakdown (engineering insurance)

Machinery breakdown covers sudden and accidental breakdown of plant and machinery, often including:

  • Electrical and mechanical failure

  • Pressure systems

  • Refrigeration or compressor failures

This can be especially relevant where a single critical machine is a bottleneck.

10) Goods in transit and cargo

If you ship devices, components, or sterile packs, you may need cover for:

  • Loss or damage in transit

  • Temperature excursions (where applicable)

  • Theft and hijack risk

If you import/export, consider marine cargo insurance and clarify Incoterms responsibilities.

11) Cyber insurance (often overlooked in manufacturing)

Medical device factories are increasingly targeted because of:

  • Valuable IP and design files

  • Sensitive QMS and batch records

  • Connected production equipment (OT)

  • Supplier portals and customer integrations

Cyber insurance may cover:

  • Incident response and forensics

  • Data restoration

  • Business interruption from cyber events

  • Ransomware negotiation and recovery

  • Liability arising from data breaches

ISO 13485 angle: Insurers will ask about access controls, backups, patching, MFA, and how you protect QMS documentation.

12) Directors’ & officers’ (D&O)

If you have external investors, a board, or significant regulatory exposure, D&O insurance can protect directors and officers against claims alleging mismanagement.

This can be relevant where:

  • A major recall impacts financial performance

  • Stakeholders allege failures in governance or disclosure

Special considerations for ISO 13485 factories

Cleanrooms, sterile manufacturing, and contamination risk

If you operate cleanrooms or sterile processes, insurers will want to understand:

  • Cleanroom classification and monitoring

  • Environmental controls and alarms

  • Gowning procedures and training

  • Sterilisation method (e.g., EtO, gamma, steam) and validation

  • Handling of nonconformities and deviations

Where a contamination event occurs, the loss may be:

  • Scrapped WIP and finished goods

  • Revalidation and downtime

  • Recall exposure if product shipped

Supplier risk and traceability

ISO 13485 requires supplier controls, but insurers still ask:

  • How you qualify and audit critical suppliers

  • How you manage changes (materials, tooling, process)

  • How you detect counterfeit components

If a supplier defect causes failures in the field, liability can still come back to the manufacturer — especially if you’re the legal manufacturer.

Regulatory environment: UKCA/CE, MHRA, and documentation

Insurance won’t replace compliance, but it can support you when the cost of response escalates.

Expect underwriting questions around:

  • Device classification and intended use

  • Adverse incident reporting process

  • Complaint handling and vigilance

  • Post-market surveillance

If you sell into the EU or globally, you’ll also need to confirm territories and local requirements.

How insurers underwrite medical device manufacturing risk

Insurers typically look at:

  • What you make: device type, classification, invasiveness, sterile/non-sterile

  • Where you sell: UK/EU vs worldwide; US exposure is a key factor

  • Your role: legal manufacturer vs contract manufacturer vs component supplier

  • Quality controls: ISO 13485 certification scope, audit history, CAPA trends

  • Claims history: incidents, near misses, recalls, complaints

  • Contracts: indemnities, limitation of liability, warranty terms

  • Risk management: training, maintenance, calibration, cybersecurity

Being ISO 13485 certified can help, but insurers still want evidence that the system is active, not just documented.

Common gaps and mistakes to avoid

  • Assuming product liability includes recall costs: often it doesn’t.

  • Underinsuring BI indemnity period: revalidation and equipment lead times can exceed 12 months.

  • Not declaring territories correctly: exporting “occasionally” can still create exposure.

  • Ignoring contract wording: broad indemnities can create uninsured liabilities.

  • No cover for design/technical advice: if you co-design, PI matters.

  • Cyber excluded or too small: manufacturing downtime from ransomware is now a major risk.

Practical checklist: what to prepare before getting quotes

To get better terms and faster underwriting, prepare:

  • ISO 13485 certificate and scope

  • Summary of devices manufactured (type, classification, sterile/non-sterile)

  • Turnover split by territory (UK/EU/ROW/US/Canada)

  • Top customers and contract manufacturing arrangements

  • Recall plan and traceability approach

  • Complaint history and CAPA summary (high-level)

  • Property details: construction, protections, sums insured

  • Business continuity plan and key dependencies

  • Cyber controls overview (MFA, backups, EDR, patching)

FAQs: ISO 13485 medical device manufacturing insurance

Does ISO 13485 certification reduce insurance premiums?

It can help, especially for product liability and recall underwriting, because it demonstrates structured quality controls. But pricing still depends heavily on device type, territories, claims history, and contract terms.

Do contract manufacturers still need product liability insurance?

Often yes. Even if the OEM is the legal manufacturer, contract manufacturers can be brought into claims via allegations of manufacturing defect, negligence, or breach of contract.

Is product recall insurance mandatory?

Not legally, but many OEM contracts and risk profiles make it strongly advisable — particularly for sterile devices, implantables, or high-volume consumer medical devices.

What if we only manufacture components?

Component manufacturers can still face claims if a component defect contributes to device failure. You’ll want product liability that clearly includes components and your role in the supply chain.

Do we need cyber insurance if we don’t store patient data?

Yes, potentially. Cyber risk isn’t only about personal data. Ransomware can halt production, corrupt batch records, and disrupt supply chains.

Next step: build an insurance programme that matches your factory

ISO 13485 certification is a strong foundation — but your insurance should reflect your actual exposures: what you make, where you sell, how you validate, and what your contracts require.

If you want, share:

  • The types of devices you manufacture (and whether sterile)

  • Where you sell (UK/EU/US)

  • Whether you design/co-design

  • Your annual turnover

…and I’ll outline a practical insurance structure (limits, key endorsements, and common insurer questions) tailored to your factory.

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