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INSURANCE FOR SENSOR & INSTRUMENTATION MAKERS
Why Specialist Insurance Matters for Sensor & Instrumentation Manufacturers
Sensor and instrumentation manufacturers operate at the point where precision meets responsibility. Your products measure, monitor and control critical systems across industry: temperature probes for food processing lines, pressure transmitters in industrial plants, vibration sensors on rotating machinery, flow meters in utilities, torque sensors in automated assembly, and complex measurement devices used in laboratories and calibration environments.
When a sensor reading is wrong, the claim is rarely “just” the cost of the unit. An incorrect output can lead to incorrect decisions, process instability, unsafe operation, or silent degradation over time. That can trigger shutdowns, scrapped batches, contamination incidents, machinery damage, environmental releases, injury allegations, and contract disputes. In higher-hazard sectors (oil & gas, chemicals, power generation, ATEX environments, rail, defence, medical devices, aerospace supply chains) the liability exposure can escalate quickly.
Standard business insurance is often not enough for this niche. Insurers will want to understand your testing regime, traceability, quality systems, calibration processes, design responsibility, software/firmware involvement, export territories, and the typical downstream use cases of your products. Insure24 helps you present the risk properly and arrange cover that aligns with your contracts and real-world exposures.
Core Covers for Sensor & Instrumentation Manufacturing
Most sensor and instrumentation manufacturers need a combination of liability covers and “asset / continuity” covers. The right mix depends on whether you: (1) design to client specifications, (2) manufacture to your own designs, (3) integrate electronics/firmware, (4) install or commission on site, or (5) sell through distributors and OEM channels.
- Product Liability – Claims for injury or property damage arising from defective sensors, devices, enclosures, wiring or assemblies.
- Professional Indemnity (Design & Specification) – Allegations of negligence in design, specification, drawings, calibration advice, or performance representation.
- Public Liability – Site visits, demonstrations, commissioning, service work, or installation activities at customer premises.
- Employers’ Liability – UK legal requirement for staff in assembly, soldering, test, calibration, packing and dispatch.
- Product Recall / Rectification – Costs to trace, isolate, repair or replace affected batches and manage customer communications.
- Property, Stock & Contents – Cover for components, PCBs, connectors, housings, sensors, finished stock and tools.
- Business Interruption – Loss of gross profit after insured events (e.g., fire, flood) plus extra expenses to keep trading.
- Goods in Transit – Damage/loss in transit to customers, integrators or distributors (UK and worldwide options).
Common Risk Areas for Sensors, Measurement & Instrumentation Businesses
Underwriters look for the real-world “failure modes” associated with your products and processes. The strongest insurance submissions are clear on: quality control, traceability, testing, calibration standards, design controls, and how you handle field failures.
Accuracy, Drift & Calibration Risk
Many sensor claims are not dramatic “bang” events; they are gradual. A temperature probe that drifts by a few degrees can ruin production batches. A pressure transmitter that reads low can cause process instability. A flow meter that reads high can mask a leak. Insurers will want to know how you: calibrate, verify, label, store calibration certificates, and handle re-calibration intervals.
- Calibration traceability (e.g., UKAS/NIST traceable where relevant)
- Incoming inspection and batch control for critical components
- Environmental controls (humidity/temperature) during test and calibration
- Data retention for calibration results and serial number traceability
Design, Firmware & Integration Exposure
Where sensors integrate firmware, signal conditioning, wireless modules or software configuration tools, your risk can cross into professional services, cyber and operational technology (OT). Even “simple” devices can create complex downstream failure chains when integrated into PLC/SCADA systems, building management, safety shut-down circuits or automated manufacturing lines.
- Configuration mistakes and misapplication claims
- Firmware defects causing incorrect outputs
- EMC susceptibility and interference issues
- Documentation / datasheet representation disputes
Electrical, Thermal & Fire Hazards
Products containing power supplies, heating elements, batteries, or high-current terminals raise fire and overheating exposures. Claims may involve damaged property, business interruption at the customer site, and allegations of inadequate design safeguards.
- Short circuits, insulation failure or incorrect polarity
- Battery thermal runaway (where applicable)
- Ingress protection failures (IP ratings) leading to corrosion or arcing
- Incorrect installation instructions or warnings
ATEX / Hazardous Area Use
If products are used in hazardous atmospheres (dust or gases), ATEX-related exposure can be high. Even if you do not certify products yourself, selling into these environments can create contractual obligations and strict documentation requirements. Insurance must reflect this use case.
- Hazardous area certificates and change control
- Misuse / misapplication and contractual disputes
- Supply chain and component substitution controls
- Field repairs and modification risk
What Insurers Typically Ask for When Quoting
Sensor and instrumentation insurance is underwritten on technical detail. Providing strong information helps improve terms and avoids delays. Insure24 will guide you through the question set, but the following is a practical “insurer-ready” checklist.
Operations & Products
- Product types (e.g., temperature, pressure, vibration, flow, proximity, level, torque, gas detection, lab instrumentation)
- Typical application sectors (manufacturing, utilities, food, pharma, automotive, rail, marine, aerospace, oil & gas)
- Are products safety-critical? Any SIL-rated or used in safety instrumented systems?
- Do you provide installation, commissioning, or on-site service?
- Turnover split: UK vs export; OEM/direct; service vs manufacture
- Largest single contract / batch values and typical project sizes
Quality, Testing & Traceability
- Quality systems: ISO 9001, sector-specific (e.g., ISO 13485, IATF 16949) where applicable
- Incoming inspection, batch control and approved supplier lists
- Routine test procedures and final inspection criteria
- Calibration approach (in-house vs external), certificate retention and traceability
- Serial number traceability and build history records
- Field failure handling, CAPA, and change control processes
Contractual & Legal Exposure
- Any contractual penalties / liquidated damages exposures?
- Any warranty periods beyond standard? (e.g., 3–5 years)
- Do you accept “fitness for purpose” clauses?
- Do you cap liability in your terms and conditions?
- Any customers requiring specific limits (e.g., £5m / £10m product liability)?
Territories & Export
- Where do you sell? UK only, EU, worldwide?
- Any USA/Canada exposure? (Often requires specific insurer approval)
- Use of distributors / integrators and contract arrangements
- Import/export compliance considerations and documentation processes
Cyber, Data & Intellectual Property Risk in Instrumentation
Modern sensors and instrumentation often connect to networks, send data to platforms, or integrate into building management, industrial automation and remote monitoring solutions. That creates data and cyber considerations even for “hardware-first” manufacturers.
Connected Devices & OT Exposure
If your devices connect via Ethernet, Wi-Fi, cellular, LoRaWAN, BLE or proprietary protocols, customers may require assurances around security. Cyber insurance can support response costs if a vulnerability is exploited, and can align with contractual requirements.
- Firmware updates and vulnerability management
- Secure provisioning and credentials handling
- Remote access controls and supplier management
- Incident response and notification costs (where applicable)
CAD/CAM, Drawings & IP
Instrumentation manufacturing often involves proprietary designs and sensitive customer specifications. A cyber incident can disrupt production, expose drawings, or impact product integrity. Even without a headline-making breach, ransomware can cause downtime and missed delivery dates.
- Business interruption from cyber incidents
- Data restoration costs and forensic investigation
- Extortion threats and support services
- Third-party claims arising from compromised systems (where cover applies)
Compliance & Regulatory Considerations
Compliance requirements vary by product type and destination market, but insurers commonly ask about design controls and conformity processes. Good documentation and change control can materially improve underwriting confidence.
- UKCA / CE considerations – product documentation, technical file controls, change management.
- EMC / Electrical safety – interference, susceptibility, and safe operation in intended environments.
- ATEX / hazardous area use – where devices are designed or sold into explosive atmospheres.
- Functional safety / SIL – if used in safety instrumented systems (depending on your sector).
- Medical / life sciences – where devices are used in regulated environments (documentation and QC are key).
- Calibration traceability – robust certificate control and retention processes.
Real-World Claim Scenarios in Sensors & Instrumentation
Understanding what can go wrong helps you choose the right limits and extensions. Here are common scenarios we see underwriters focus on for this niche.
Incorrect Readings Causing Process Loss
A batch of temperature probes leaves the factory with calibration drift outside tolerance. A food manufacturer relies on the readings and later finds the process was outside specification. The claim includes scrapped goods, investigation costs, and allegations that your datasheet tolerances were not met.
- Potential response: product liability (if damage/injury), product recall/rectification, defence costs
- Risk controls: calibration traceability, final test records, batch retention samples
Sensor Failure Leading to Equipment Damage
A pressure sensor used in an industrial line fails intermittently. The system fails to trigger protective action in time and equipment is damaged. The customer alleges the sensor’s failure mode was foreseeable and pursues recovery costs and downtime.
- Potential response: product liability, contractual risk review, claims handling support
- Risk controls: burn-in testing, failure mode analysis, robust documentation and warnings
Documentation / Specification Dispute
A customer claims your product was sold as suitable for a high-vibration environment, but the application exceeds the stated limits. A dispute arises about datasheet wording and sales representations.
- Potential response: professional indemnity (design/spec advice), legal defence costs
- Risk controls: clear datasheets, application checks, written sign-offs for non-standard uses
Recall / Field Rectification
A component substitution by a supplier causes unexpected output noise in certain conditions. You need to trace affected serial numbers, notify customers, and coordinate replacements to prevent downstream issues.
- Potential response: product recall/rectification, logistics and communication costs
- Risk controls: approved supplier lists, change control, incoming inspection
Insure24 understood the technical nature of our products and the contractual exposure with OEM customers. They helped us present our testing and calibration process clearly to underwriters and secured strong terms.
Managing Director, UK Sensor ManufacturerWhy Choose Insure24 for Sensor & Instrumentation Insurance
Manufacturing insurance performs best when the policy matches your technical reality. We help you structure the presentation for underwriters and ensure that the policy wording matches how you trade — including your supply chain, export territories, service activity, and documentation obligations.
- Specialist placement – We know what underwriters ask for in precision manufacturing and electronics.
- Contract-aware advice – Help aligning cover with key customer terms, warranty demands and liability caps.
- Claims support – Clear guidance if a field issue arises, including notifications and evidence capture.
- Fast quotations – Efficient submissions, with realistic timescales for underwriter review.
- Scalable cover – Suitable for micro-manufacturers through to multi-site operations and export-heavy businesses.
How to Get Sensor & Instrumentation Manufacturing Insurance
The fastest route to good terms is a clean submission with clear technical detail. If your business includes design and bespoke specification work, insurers may take 1–2 business days to review. We’ll keep you informed and help you present the risk properly.
- 1. Enquire – Call 0330 127 2333 or submit the online form.
- 2. Risk review – We confirm products, turnover split, export territories and design activity.
- 3. Underwriter presentation – We highlight your QA, calibration and traceability controls.
- 4. Quote & options – We explain limits, exclusions, and any key warranties.
- 5. Bind cover – Get documentation issued and remain compliant with customer requirements.
FREQUENTLY ASKED QUESTIONS
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Do sensor manufacturers need professional indemnity insurance?
Often, yes. If you provide design input, specification support, calibration advice, configuration tools, or performance representations that a customer relies on,
professional indemnity can help cover claims alleging negligence, design/specification error, or misrepresentation (subject to policy terms).
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What’s the difference between product liability and product recall cover?
Product liability typically responds to injury or property damage claims. Product recall/rectification is designed for the practical costs of tracing,
removing, repairing or replacing faulty products (and managing notifications), even when there is no injury claim. Cover varies by insurer and wording.
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Can you cover exports and worldwide sales?
Yes. We can arrange UK-only, EU or worldwide territories, and discuss any USA/Canada exposure where required.
Your sales channels (direct vs distributor/OEM) and end-use sectors will influence underwriting.
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What limits are common for instrumentation manufacturers?
Many manufacturers carry £2m–£10m for products/public liability depending on customer requirements and sector exposure.
Professional indemnity limits vary widely (often £250k to £5m+). The right limit depends on worst-case scenarios and contract terms.
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Does insurance cover calibration errors or drift?
If an issue leads to injury or property damage, product liability may respond. Where the allegation is negligence in calibration advice,
specification or professional services, professional indemnity is often relevant. We’ll help you structure cover to reflect how your business operates.
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How quickly can I get a quote?
For straightforward risks, we can often obtain terms quickly. For businesses with design responsibility, hazardous area exposure, or complex exports,
allow 1–2 business days for underwriters to review the details and confirm terms.
UNIQUE INSURANCE
TAILORED FOR YOU
Whether you manufacture off-the-shelf sensors or build bespoke instrumentation for OEM customers, Insure24 can arrange cover that aligns with your real operational risk. Speak to our team to discuss limits, territories, and how best to present your testing and traceability procedures to underwriters.
PROTECT YOURSELF
- Defence costs and damages for product liability claims
- Design/specification risk cover (where applicable)
- Recall/rectification support after batch issues
- Protection for stock, tools, equipment and premises
- Business interruption cover to keep cashflow stable after a major incident