Manufacturing Insurance in South Wales (Cardiff & Newport): A Practical Guide for Manufacturers

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Manufacturing Insurance in South Wales (Cardiff & Newport): A Practical Guide for Manufacturers

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Manufacturing Insurance in South Wales (Cardiff & Newport): A Practical Guide for Manufacturers

Introduction: why manufacturing insurance matters in Cardiff and Newport

Cardiff and Newport sit at the heart of South Wales’ industrial and technology ecosystem. From precision engineering and fabrication to electronics, medical technology, plastics, food production, and specialist assembly, manufacturers here often operate with tight margins, complex supply chains, and demanding customer contracts.

That combination creates a simple reality: one incident can cause a disproportionate financial hit. A fire can stop production for months. A faulty component can trigger a product recall. A cyber event can halt operations and expose sensitive customer data. And a single injury can lead to enforcement action, fines, and costly claims.

Manufacturing insurance is designed to protect your business against these scenarios—so you can keep trading, meet contractual obligations, and safeguard your balance sheet.

This guide explains the key covers manufacturers in Cardiff and Newport typically need, the risks insurers look at, and how to arrange a policy that fits your operation.

What is manufacturing insurance?

“Manufacturing insurance” isn’t usually one single policy. It’s typically a package of covers—often arranged as a Commercial Combined policy—built around your premises, plant, people, products, and liabilities.

A well-structured manufacturing programme can include:

  • Property insurance (buildings, contents, stock)

  • Business interruption (loss of gross profit)

  • Employers’ liability

  • Public and products liability

  • Product recall / contamination (where relevant)

  • Professional indemnity (for design, specification, consultancy)

  • Tools, plant and machinery cover (including breakdown)

  • Goods in transit and stock at other locations

  • Cyber insurance

  • Directors’ and officers’ liability (optional)

  • Legal expenses (optional)

The right mix depends on what you make, how you make it, where you trade, and what your contracts require.

Why Cardiff and Newport manufacturers face unique risk pressures

Every manufacturing business has risk, but South Wales manufacturers often have a few extra factors in play:

1) Mixed-use industrial estates and shared risk

Many Cardiff and Newport sites sit on industrial estates where neighbouring businesses may store flammables, operate hot works, or have high footfall. Insurers will consider aggregate risk—your risk plus the risk next door.

2) Supply chain dependency

Manufacturers frequently rely on specific suppliers (materials, components, packaging) and key customers (OEMs, distributors, public sector). If a supplier fails or a customer cancels, the financial impact can be immediate.

3) Contractual and tender requirements

Engineering, construction-adjacent manufacturing, and medical technology supply chains often require evidence of:

  • Employers’ liability (typically £10m)

  • Public/products liability (often £2m–£10m)

  • Professional indemnity (where design/spec is involved)

  • Product liability with specific exclusions removed

  • Cyber cover or data protection controls

4) Compliance and regulatory exposure

Depending on your sector, you may have to demonstrate strong controls around:

  • HSE health and safety compliance (risk assessments, training, machinery guarding)

  • Fire safety and evacuation planning

  • GDPR and data security (especially if you hold customer or employee data)

  • Quality management (ISO standards)

  • Sector-specific requirements (e.g., medical technology with UKCA/CE considerations)

Insurers don’t just price the risk—they also look at how you manage it.

Core covers for manufacturing businesses in Wales

1) Property insurance: buildings, contents, stock and materials

Property insurance protects your physical assets against insured perils such as fire, flood, storm, escape of water, theft, and malicious damage.

Manufacturers should pay close attention to:

  • Buildings (if you own the premises): rebuild cost, not market value

  • Contents: tools, fixtures, office equipment, racking

  • Stock and raw materials: including seasonal peaks

  • Work in progress: often overlooked but critical

  • Stock at other locations: third-party storage, off-site warehouses

Cardiff/Newport tip: If you’re near waterways or have a history of surface water issues, flood risk may affect terms. Insurers may ask about flood defences, drainage maintenance, and previous claims.

2) Business interruption (BI): protecting your gross profit

Business interruption insurance is what keeps many manufacturers afloat after a major incident. It can cover loss of gross profit and increased cost of working (e.g., outsourcing production, temporary premises) following insured damage.

Key BI decisions include:

  • Indemnity period: often 12, 18, or 24 months. Manufacturing rebuild and re-commissioning can take time.

  • Sum insured: based on gross profit, not turnover.

  • Extensions: suppliers/customers, denial of access, utilities, and sometimes non-damage BI.

If you rely on one or two key machines, BI should be aligned with machinery breakdown cover (more on that below).

3) Employers’ liability (EL): a legal requirement

If you employ staff, you’re generally required by UK law to have employers’ liability insurance (commonly £10m).

Manufacturing environments involve higher injury potential due to:

  • Machinery and moving parts

  • Manual handling

  • Forklift and warehouse operations

  • Hot works and welding

  • Slips, trips, and falls

  • Exposure to fumes, dust, or chemicals

Insurers will look for evidence of robust HSE controls: training records, maintenance schedules, PPE policies, and incident reporting.

4) Public liability (PL): third-party injury or property damage

Public liability covers claims from third parties (visitors, contractors, members of the public) for injury or property damage arising from your business activities.

Examples:

  • A courier slips in your loading bay

  • A contractor damages a client’s property during installation

  • A visitor is injured during a site tour

Limits commonly range from £2m to £10m depending on contracts and risk profile.

5) Products liability: when what you make causes harm

Products liability is essential for manufacturers. It covers claims arising from products you manufacture, supply, or distribute.

Typical triggers include:

  • A component failure causes property damage

  • A product defect causes injury

  • A batch issue leads to widespread failures

Insurers will consider:

  • Your quality control processes

  • Traceability and batch coding

  • Supplier vetting

  • Testing and certification

  • Contractual liability clauses

  • Territories (UK only vs exports)

If you export to the USA/Canada, you must disclose this—terms can change significantly.

6) Product recall / contamination (sector dependent)

Not all manufacturers need recall cover, but for food, cosmetics, medical technology, and safety-critical components, it can be a major gap if omitted.

Recall cover can help with:

  • Recall logistics and communications

  • Disposal and replacement costs

  • Specialist consultants

  • Sometimes loss of gross profit (depending on wording)

Even if you don’t buy recall cover, you should have a documented recall plan—insurers like to see it.

7) Plant and machinery: engineering inspection and breakdown

Manufacturers often have high-value machinery where a single failure can stop production.

Machinery breakdown cover can help with:

  • Sudden and unforeseen mechanical/electrical breakdown

  • Repair or replacement costs

  • Optional business interruption following breakdown

Depending on your equipment, you may also need statutory engineering inspections (e.g., pressure systems, lifting equipment). Good maintenance records can improve insurability and pricing.

8) Cyber insurance: modern manufacturing is a digital target

Manufacturers are increasingly targeted due to:

  • Ransomware disrupting production

  • Supplier compromise (third-party risk)

  • Theft of designs and IP

  • Fraud and invoice diversion nCyber insurance can include incident response, data restoration, business interruption, and liability for data breaches.

Insurers may ask about MFA, backups, patching, endpoint protection, and staff training.

9) Professional indemnity (PI): if you design, specify, or advise

If you provide design input, specifications, consultancy, or sign-off—particularly in engineering and medical technology supply chains—professional indemnity can be critical.

PI covers claims arising from:

  • Negligent design

  • Incorrect specification

  • Errors in advice or documentation

  • Failure to meet performance requirements

Many contracts require PI even if you consider yourself “just a manufacturer.” If you have any design responsibility, it’s worth reviewing.

Common manufacturing risks insurers will ask about

When arranging manufacturing insurance in Cardiff or Newport, expect questions around:

  • What you manufacture and how it’s used

  • Materials used (plastics, solvents, flammables)

  • Any heat processes (welding, cutting, ovens)

  • Dust and extraction systems (wood, flour, metal dust)

  • Fire protections (alarms, sprinklers, extinguishers)

  • Security (CCTV, alarms, shutters, access control)

  • Claims history

  • Quality control and certifications (e.g., ISO)

  • Subcontracting and outsourced processes

  • Export territories and contract terms

Being able to answer clearly—and evidence controls—often leads to better outcomes.

How to choose the right sums insured (and avoid underinsurance)

Underinsurance is one of the most common (and expensive) mistakes in manufacturing policies.

Buildings

Use a professional rebuild valuation where possible. Rebuild cost includes demolition, professional fees, and compliance with current building regulations.

Stock and materials

Consider peak periods and the value of work in progress. If you hold customer goods, make sure this is declared.

Gross profit (BI)

Gross profit for insurance is not the same as accounting gross profit in every case. It’s typically turnover less uninsured working expenses. Work with your broker/accountant to set this correctly.

Indemnity period

Ask: “If we had a major fire, how long to rebuild, replace machinery, re-certify, and regain customers?” Many manufacturers need 18–24 months.

Risk management steps that can reduce premiums (and claims)

Insurers reward good risk management. Practical steps include:

  • Documented HSE risk assessments and method statements

  • Hot works permits and contractor controls

  • Preventative maintenance schedules and logs

  • PAT testing and electrical inspections

  • Housekeeping and waste management (especially combustible waste)

  • Fire compartmentation and clear escape routes

  • Intruder alarm maintenance and keyholder procedures

  • Quality control records and traceability

  • Cyber hygiene: MFA, backups, patching, training

Even small improvements can make a difference—especially if you’re in a higher-risk trade.

Cardiff and Newport: examples of manufacturers and typical cover needs

Every business is different, but here are a few common profiles in South Wales:

Precision engineering and fabrication

  • High plant values, hot works exposure

  • Strong need for machinery breakdown and BI

  • Products liability for safety-critical components

Electronics and specialist assembly

  • Stock values can be high and theft-attractive

  • ESD controls and quality processes matter

  • Cyber risk can be elevated due to IP

Food production and packaging

  • Contamination and recall exposures

  • Cold storage breakdown (if applicable)

  • Strong hygiene and traceability requirements

Medical technology and regulated manufacturing

  • Contractual requirements for PI and product liability

  • Documentation and quality management are key

  • Potential need for recall and cyber cover

How to arrange manufacturing insurance in Wales (step-by-step)

A smoother placement usually comes down to preparation. Here’s a simple process:

  1. Map your risks: premises, processes, people, products, and contracts.

  2. Gather key figures: turnover, wage roll, stock values, plant values, gross profit.

  3. List your key controls: fire protection, security, HSE processes, QC, cyber controls.

  4. Review contracts: required limits and any unusual liability clauses.

  5. Choose policy structure: combined policy vs separate covers.

  6. Check exclusions and extensions: especially for heat work, exports, recall, and cyber.

  7. Confirm claims support: how incidents are handled and what documentation is needed.

A broker who understands manufacturing can help present your risk to insurers in the best light—often improving terms.

FAQs: manufacturing insurance in Cardiff and Newport

Do I need manufacturing insurance if I’m a small workshop?

If you have premises, equipment, stock, or any liability exposure, insurance is still important. Even a small workshop can face a major loss from fire, theft, or injury.

Is employers’ liability always required?

In most cases, yes—if you employ staff. There are limited exceptions, but most trading manufacturers will need EL.

What if I manufacture parts that go into someone else’s product?

You may still be liable if your component contributes to a failure. Products liability and strong quality control/traceability are essential.

Does public liability cover my products?

Not necessarily. Public liability covers third-party injury/property damage from your activities. Products liability is the cover for claims arising from products you supply.

Can I cover machinery breakdown and the loss of income it causes?

Yes. Machinery breakdown can cover repair/replacement, and you can often add business interruption following breakdown.

What if I store flammable liquids or use solvents?

You must disclose it. Insurers will want details on storage, quantities, ventilation, COSHH controls, and fire precautions.

Will exporting affect my insurance?

Often, yes. Export territories, especially the USA/Canada, can increase exposure and may require different terms.

How quickly can manufacturing insurance be arranged?

If information is ready, many policies can be arranged quickly. Complex risks, high values, or unusual processes may take longer due to underwriting.

Final thoughts: protect production, cashflow, and reputation

Manufacturing businesses in Cardiff and Newport are a vital part of the Welsh economy—but they face real operational and contractual pressures. The right insurance programme is about more than ticking a box: it’s about protecting your ability to deliver, your cashflow, and your reputation.

If you’d like a tailored manufacturing insurance quote for a Cardiff or Newport business, it helps to start with a quick review of your processes, values, and contracts—so your cover matches the reality of how you operate.

Call 0330 127 2333 or request a quote online at https://www.insure24.co.uk/ to discuss manufacturing insurance for your Wales-based business.

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