Wearable Medical Device Production & Manufacturing Insurance: What UK Manufacturers Need to Know

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Wearable Medical Device Production & Manufacturing Insurance: What UK Manufacturers Need to Know

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Wearable Medical Device Production & Manufacturing Insurance: What UK Manufacturers Need to Know

Wearable medical devices are one of the fastest-moving parts of health tech. From continuous glucose monitors and cardiac patches to smart inhalers, connected hearing aids, and rehab wearables, the market is growing—but so are the risks.

If you design, assemble, manufacture, or distribute wearable medical devices in the UK, insurance isn’t just a “nice to have”. It’s a key part of winning contracts, meeting regulatory expectations, protecting cashflow, and keeping the business alive when something goes wrong.

This guide breaks down the main insurance covers wearable medical device producers typically need, the risks insurers will look at, and practical ways to reduce premiums without cutting corners.

What counts as a wearable medical device?

A wearable medical device is typically a product intended for medical purposes (diagnosis, monitoring, treatment, or alleviation of disease or injury) that is worn on the body. Examples include:

  • Continuous glucose monitoring (CGM) systems

  • ECG patches and cardiac monitors

  • Smartwatches with medical-grade monitoring features

  • Smart inhalers and adherence trackers

  • Wearable blood pressure monitors

  • Hearing aids and connected audiology devices

  • Sleep apnoea monitoring wearables

  • Rehabilitation wearables (motion tracking, biofeedback)

  • Remote patient monitoring (RPM) kits with wearable components

Wearables often combine hardware, firmware, software, apps, cloud services, and data processing. That “stack” creates a wider risk profile than traditional medical devices.

Why wearable medical device manufacturers face unique insurance risk

Wearable medical devices sit at the intersection of:

  • Product liability (physical injury or property damage)

  • Professional liability (design errors, advice, specification failures)

  • Cyber and data risk (patient data, cloud systems, connected devices)

  • Regulatory risk (UKCA marking, MDR alignment, post-market surveillance)

  • Supply chain risk (components, batteries, sensors, contract manufacturers)

Even a small issue—like a battery overheating, a sensor drifting out of tolerance, or a firmware update causing incorrect readings—can trigger:

  • Patient harm allegations

  • Product recall costs

  • Contract disputes

  • Regulatory investigations

  • Reputation damage

  • Class-action style claims (especially if selling internationally)

Insurance won’t prevent problems, but it can stop one incident from becoming a business-ending event.

Core insurance covers for wearable medical device production

1) Product Liability Insurance (including Product Recall options)

What it covers: Claims from third parties for injury or property damage caused by your product.

For wearable medical devices, product liability claims can arise from:

  • Incorrect readings leading to delayed treatment

  • Skin burns or irritation from adhesives or device heat

  • Battery failure (thermal runaway, swelling, fire)

  • Electrical faults or charging issues

  • Mechanical failure (straps, housings, sharp edges)

  • Allergic reactions to materials

What to look for in the policy:

  • Adequate limit of indemnity (often £2m–£10m+ depending on contracts)

  • Worldwide cover if exporting

  • USA/Canada exposure clarity (often higher risk and higher premium)

  • Inclusion of “failure to warn” and “misuse” allegations

  • Clear definition of “product” including accessories, consumables, and packaging

Product recall / product guarantee extensions:

Wearables are high-risk for recall events because they’re deployed at scale and updated frequently. Recall cover can help with:

  • Customer notification and logistics

  • Shipping and disposal

  • Replacement costs

  • PR and crisis management

  • Regulatory liaison support (depending on insurer)

Not all product liability policies include recall automatically—often it’s an add-on.

2) Medical Malpractice / Professional Indemnity (PI)

What it covers: Claims alleging your professional services caused financial loss or harm—typically design, specification, testing, or advice failures.

Wearable manufacturers often need PI because they:

  • Provide device performance claims

  • Offer implementation guidance to clinics

  • Provide training, onboarding, or clinical workflow advice

  • Produce software and algorithms that influence clinical decisions

PI is especially relevant if your wearable includes:

  • Decision-support features

  • Alerts and thresholds

  • AI/ML components

  • Clinical dashboards

Key policy considerations:

  • Cover for “technology services” and “software as a medical device” (SaMD)

  • Retroactive date (covers past work)

  • Contractual liability (some contracts push risk onto you)

  • Worldwide jurisdiction and defence costs

3) Cyber Insurance (data + systems + liability)

Wearables are connected devices. That means cyber risk is not theoretical.

What cyber insurance can cover:

  • Data breach response (forensics, notification, credit monitoring)

  • Regulatory investigations and fines (where insurable)

  • Ransomware and business interruption

  • Third-party claims (patients, partners, hospitals)

  • Media liability (website/app content)

Why it matters for wearables:

  • Patient data is sensitive and regulated

  • Devices can be attacked via Bluetooth, Wi-Fi, APIs, or mobile apps

  • Cloud outages can disrupt monitoring

  • Firmware updates can introduce vulnerabilities

Insurers will often ask about:

  • MFA and access controls

  • Encryption (at rest and in transit)

  • Vulnerability management and patching

  • Incident response plan

  • Supplier security (cloud providers, dev partners)

4) Employers’ Liability (EL) – legally required

If you employ staff in the UK, Employers’ Liability is typically required by law.

Manufacturing environments can include:

  • Soldering and electronics assembly risks

  • Chemical exposure (cleaning agents, adhesives)

  • Repetitive strain injuries

  • Manual handling

  • Machinery hazards

EL protects you if an employee claims illness or injury due to their work.

5) Public Liability Insurance

Public liability covers injury or property damage to third parties arising from your premises or operations (not the product itself).

Examples:

  • A visitor slips in your facility

  • Damage occurs during on-site installation or training

  • Trade show incidents

Many businesses bundle public and product liability, but it’s worth checking the split and definitions.

6) Property Insurance (buildings, contents, stock)

Wearable device production often involves high-value equipment and stock:

  • Test rigs, calibration tools, microscopes

  • Pick-and-place machines (if in-house)

  • Clean benches, ESD equipment

  • Finished goods inventory

  • Components (sensors, chips, batteries)

Property insurance can cover:

  • Fire, flood, theft, malicious damage

  • Stock and materials

  • Equipment breakdown (often an add-on)

If you rely on specialist machinery, consider Machinery Breakdown and Business Interruption to protect cashflow during downtime.

7) Business Interruption (BI)

BI covers loss of gross profit and ongoing costs if an insured event disrupts operations.

For wearable manufacturers, BI triggers might include:

  • Fire in the assembly area

  • Flood damaging test equipment

  • Supplier disruption (sometimes covered via extensions)

  • Cyber incident causing downtime (if included under cyber)

BI is especially important if you have:

  • Tight delivery schedules

  • Penalty clauses in contracts

  • Single-site operations

8) Directors’ & Officers’ (D&O) Liability

D&O protects directors and senior managers against claims alleging wrongful acts in management.

Wearable medical device businesses may face D&O exposures from:

  • Investor disputes

  • Regulatory allegations

  • Misrepresentation claims

  • Employment disputes at board level

If you’re raising capital, selling internationally, or operating in a heavily regulated environment, D&O is worth considering.

9) Commercial Legal Expenses

Legal expenses cover can help with:

  • Contract disputes with suppliers or customers

  • Employment tribunals

  • Tax investigations (policy dependent)

For manufacturers working with contract manufacturers, distributors, and healthcare providers, contract disputes are common—and expensive.

10) Goods in Transit and Marine Cargo

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

  • Loss or damage in transit

  • International shipments

  • Temperature-sensitive or fragile items

Relying solely on courier liability is risky—limits are often low and exclusions are common.

Key risks specific to wearable medical device production

Insurers typically underwrite wearable medical device businesses by looking at where failures can happen across the product lifecycle.

Design and engineering risk

  • Sensor accuracy and drift

  • Battery design and charging safety

  • Material selection (skin contact, allergens)

  • Human factors and usability

  • Environmental performance (sweat, water ingress, heat)

Manufacturing and quality control risk

  • Component variability and counterfeit parts

  • ESD damage to electronics

  • Calibration errors

  • Poor traceability (batch/serial tracking)

  • Inadequate incoming inspection

Software and update risk

  • Firmware update failures

  • App compatibility issues

  • Algorithm changes affecting outputs

  • Cloud dependency and outages

Regulatory and compliance risk

  • UKCA marking and technical documentation

  • Post-market surveillance

  • Vigilance reporting and corrective actions

  • Supplier qualification and audits

Distribution and use-case risk

  • Off-label use

  • Misinterpretation of data by users

  • Inadequate instructions or training

  • Third-party accessories and integrations

What insurers will ask (and how to prepare)

To get competitive terms, be ready to explain your controls clearly. Typical questions include:

  • What devices do you manufacture and what are they used for?

  • Are they implantable or non-implantable? (Wearables are usually non-implantable, but still high risk.)

  • Where are devices sold (UK only, EU, worldwide, USA/Canada)?

  • Annual turnover, projected growth, and unit volumes

  • Claims history (even if none, say “none”)

  • Quality management system (e.g., ISO 13485)

  • Testing and validation approach

  • Supplier management and component traceability

  • Complaint handling and post-market surveillance

  • Cyber security controls and data handling

Practical tip: Create a one-page “insurance underwriting pack” summarising your product, compliance, and controls. It speeds up quotes and reduces back-and-forth.

How to reduce premiums without underinsuring

Insurers price uncertainty. Your job is to reduce it.

  • Document your QMS (ISO 13485 or equivalent) and show evidence of audits

  • Strengthen traceability (serial numbers, batch records, supplier certificates)

  • Improve testing evidence (environmental, electrical, biocompatibility where relevant)

  • Have a recall plan (who does what, how you contact customers, how you isolate batches)

  • Tighten contracts (limit liability, define intended use, avoid open-ended warranties)

  • Cyber hygiene (MFA, encryption, patching, incident response plan)

  • Clear IFU and warnings (reduce “failure to warn” claims)

Common policy pitfalls to avoid

  • Assuming product liability includes recall (often it doesn’t)

  • Not declaring software/AI features (can invalidate cover)

  • No worldwide cover when exporting

  • Low limits that don’t match contract requirements

  • Exclusions for USA/Canada exposure

  • Gaps between PI and product liability (especially for software-driven harm)

Example insurance package (typical starting point)

Every business is different, but a common baseline for a UK wearable medical device manufacturer might include:

  • Product & Public Liability: £5m–£10m

  • Professional Indemnity / Tech E&O: £1m–£5m

  • Cyber: £250k–£2m (depending on data volume and dependency)

  • Employers’ Liability: £10m (common UK standard)

  • Property & Stock: based on declared values

  • Business Interruption: 12–24 months indemnity period

  • D&O: £1m–£5m (depending on funding and board exposure)

Your contract requirements may push these higher.

FAQs: Wearable medical device manufacturing insurance

Do I need product liability insurance if I’m only a contract manufacturer?

Often, yes. Even if you manufacture to someone else’s design, claims can still name you. Contracts may also require you to carry product liability and name the brand owner as an additional insured.

What if we only make components (sensors, housings, straps)?

Component manufacturers can still face product liability claims, especially if a component failure contributes to injury. You may also need product recall cover depending on how components are integrated.

Does professional indemnity cover product defects?

Not usually. PI covers professional services errors (design/specification/advice). Product defects causing injury are typically under product liability. Many wearable businesses need both.

Is cyber insurance really necessary for wearables?

If your device connects to an app, cloud service, or stores patient data, cyber risk is a core exposure. Cyber insurance can cover both response costs and business interruption.

We sell to the USA—what changes?

USA exposure often increases premiums and may require higher limits, different wording, and stricter underwriting. You’ll need to declare it clearly.

Can insurance help with regulatory investigations?

Some policies (cyber, D&O, legal expenses) may provide support for investigations and defence costs, depending on wording and what’s legally insurable.

What limits do hospitals and NHS suppliers typically require?

Requirements vary by contract, but £5m–£10m public/product liability is common. Some contracts also require PI and cyber.

Final thoughts

Wearable medical device manufacturing is exciting—but it’s also high-stakes. The right insurance programme protects your balance sheet, supports compliance, and helps you win larger contracts with confidence.

If you want, tell me:

  • What type of wearable you produce (e.g., CGM, cardiac patch, smart inhaler)

  • Where you sell (UK only or worldwide)

  • Whether you handle patient data

…and I can suggest a tighter “recommended cover checklist” and the key underwriting points to highlight for better pricing.

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