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A CHECKLIST THAT MATCHES HOW ELECTRONICS BUSINESSES REALLY OPERATE
Why Use an Insurance Checklist?
Electronics and technology manufacturing has a habit of sitting in the “gaps” between standard insurance policies. Your risks are a blend of property, high-value stock, fragile equipment, precision processes, outsourced supply chains, and downstream liability. Many businesses also do some design, integration, installation or commissioning — which adds professional and site risks.
The result is that insurance programmes can look “complete” on paper, but still fail in the real claim scenario. Common issues include: underinsured stock/WIP values, no cover for customer-owned goods, a business interruption policy that only triggers on physical damage, product liability that doesn’t match territories/end markets, and cyber cover that doesn’t reflect manufacturing OT disruption.
This checklist is designed to help you quickly sanity-check your programme before renewal or procurement onboarding. It also helps you prepare information underwriters need to quote accurately (which usually improves terms and reduces delays).
If you want us to review your current programme, call 0330 127 2333 or start a quote online.
1) Identify Your Business Model (This Drives the Cover You Need)
Before you review policy wordings, be clear on what you actually do. In electronics, tiny differences in activity can radically change liability and underwriting requirements. An OEM with global product distribution is very different from an EMS provider producing to customer drawings. A robotics integrator doing on-site commissioning has a different public liability profile to a factory-only assembler.
If you sell into regulated sectors (medical, automotive, aerospace, rail, industrial safety), underwriting questions will be deeper and product liability and recall/withdrawal options can be more restrictive. Start by mapping your “activity split” as clearly as possible.
Tick Your Main Activities
- OEM product manufacture and global distribution
- EMS / contract manufacturing (build to customer spec)
- PCB assembly (SMT/through-hole), test and inspection
- Box build, wiring looms, harnesses and final assembly
- Repair/refurbishment, rework, service and returns (RMA)
- Design/specification/advice (even if “light touch”)
- Integration/installation/commissioning at customer sites
- Software/firmware development and updates
Also Confirm
- Main end markets (consumer, industrial, medical, automotive, aerospace)
- Territories of sale (UK/EU/Worldwide, USA/Canada exposure)
- Whether you hold customer-owned stock/components on site
- Whether you use subcontractors or labour-only personnel
- Any on-site work, hot work, work at height, lifting operations
- Highest single item values (equipment, stock lots, shipments)
- Key dependencies (ERP/MES, test systems, remote access)
- Claims history, RMAs, near-misses and major incidents
2) Property, Equipment, Stock & Work-in-Progress (WIP) Checklist
In electronics, property risks aren’t only buildings and contents. The big exposures are often: high-value components, fragile test equipment, custom machinery, cleanroom/controlled environments, ESD-sensitive stock, and WIP that includes customer-supplied parts.
Underinsurance is common when stock values increase (chip shortages) or when businesses carry “buffer stock”. Another common gap is failing to insure customer-owned goods under a proper “goods in custody / bailee” basis, where contractual responsibilities exist.
Property & Stock: Check Your Limits
- Buildings sum insured (rebuild cost, not market value)
- Contents (fixtures, tools, IT, lab equipment)
- Stock maximum any one time (peak value, not average)
- WIP maximum any one time (including partially completed builds)
- High-value single items and maximum any one location
- Stock valuation basis (replacement cost, landed cost, etc.)
- Seasonal/peak uplift clauses where needed
- Off-site storage / third-party warehouse cover
Wording & Extensions to Confirm
- Customer-owned goods in custody (limits and conditions)
- Goods in transit (own vehicles, couriers, air/sea imports)
- Tooling and jigs (including customer tooling where applicable)
- Money and theft limits (especially for portable equipment)
- Deterioration of stock due to temperature/humidity where relevant
- Fire protection and security warranties you must comply with
- Sprinklers, alarms, CCTV, access control and housekeeping evidence
- ESD controls (mats, wrist straps, humidity, audit logs)
3) Machinery Breakdown, Business Interruption & Extra Expense Checklist
Many manufacturing businesses buy business interruption (BI) but don’t realise the trigger is usually physical damage at their own premises (fire/flood). If your biggest risk is equipment failure, cleanroom contamination, utilities interruption, or supplier disruption, you may need different structures or extensions.
Electronics has “bottleneck” equipment (SMT lines, AOI, X-ray, ICT/FCT, environmental chambers, burn-in, laser marking, conformal coating, robotics cells). A single breakdown can halt output. A breakdown policy can cover repair/replacement, and when paired with breakdown BI/extra expense, can protect cashflow from downtime.
Breakdown Cover: Confirm
- Equipment schedule is accurate (and includes critical bottlenecks)
- Engineering inspection requirements are met
- Cover includes electrical/mechanical breakdown and control systems
- Spare parts and specialist call-out arrangements are documented
- Leased/financed equipment responsibilities are clear
- Utilities/ancillary plant (compressors, chillers, extraction) included where needed
- Test equipment calibration and maintenance records exist
- Any exclusions for wear/tear are understood (and mitigated with maintenance)
BI / Extra Expense: Check
- Indemnity period matches realistic recovery time (often 12–24 months)
- Declared gross profit is accurate (and reflects current margins)
- Waiting period / time excess is acceptable
- Increased cost of working (ICOW) / extra expense cover is meaningful
- Alternative premises / outsourcing plans are considered
- Data, plans and software needed to restart operations are backed up
- Dependencies: ERP/MES/test systems are captured in continuity plans
- Cyber BI or system failure options considered if downtime is digital
4) Liability Checklist: Public, Employers’, Product & Professional Risks
Electronics businesses often need a “liability stack” rather than one policy. Public liability covers third-party injury/property damage from your operations. Employers’ liability covers employee injury (usually legally required). Product liability covers injury/property damage caused by products you supply. Professional indemnity covers financial loss arising from negligent design, specification or advice.
The checklist below helps you test whether policy wordings match your activities (factory-only vs site work, worldwide sales vs UK-only, regulated sectors, subcontractor use).
Public & Employers’ Liability
- Public liability limit meets client requirements (£2m/£5m/£10m)
- Definition of “business activities” includes on-site work (if you do it)
- Subcontractor and labour-only treatment is clear
- Hot work, work at height, lifting operations are declared (if applicable)
- Employers’ liability meets legal requirement (commonly £10m)
- Overseas travel/work extensions if engineers travel
- Principals indemnity / additional insured endorsements where needed
- Claims reporting process is clear (who, when, what evidence)
Product Liability & PI
- Territories include where you sell (EU/Worldwide, USA/Canada if needed)
- End market disclosure is accurate (medical/auto/aerospace can change terms)
- Completed operations wording is appropriate
- Contractual liability expectations are understood (penalties often excluded)
- PI in place if you design, specify, configure or advise (even “a little”)
- PI covers software/firmware where relevant (wording dependent)
- Retroactive date / continuous cover is protected
- Product recall/withdrawal expense options considered where exposure exists
We thought we had “all the cover”, but our WIP and customer stock values weren’t reflected in the limits. This checklist helped us spot the gap before renewal.
Finance Director, EMS ProviderGET THE CORE RIGHT
- Property, stock and WIP limits aligned to peak values
- Breakdown cover for bottleneck equipment
- BI structured for realistic recovery and extra expense
- Transit and custody cover where components move and are stored
- Liability stack aligned to what you actually do
AVOID COMMON GAPS
- Customer-owned goods not insured despite contractual responsibility
- Product liability territories don’t match where you sell
- No PI despite design/configuration responsibilities
- BI that only triggers on physical damage while downtime is operational/digital
- Cyber cover that doesn’t reflect OT and manufacturing disruption
5) Underwriting Submission Checklist (What to Prepare)
Strong submissions reduce premium friction and speed up quotations. Underwriters want clarity on activities, values, controls and claims history. If the submission is vague, insurers often respond with restrictive exclusions or conservative limits.
Use this list to prepare renewal data and answer typical insurer questions quickly.
Operational & Financial Data
- Turnover split by activity (OEM/EMS/install/service/design)
- Territories and export split (UK/EU/Worldwide/USA/Canada)
- Top customer sectors and any regulated end markets
- Property schedule, rebuild values and key equipment list
- Stock/WIP peak values and valuation basis
- Customer stock in custody values and contractual responsibilities
- BI figures: gross profit, indemnity period, dependencies
- Claims history incl. RMAs and major incidents with corrective actions
Controls & Governance Evidence
- Fire protection and security measures (alarms, CCTV, access control)
- Quality governance (traceability, test coverage, calibration, CAPA)
- ESD controls and audit approach
- Change control for components/firmware and re-test rules
- Supplier approval and counterfeit prevention measures
- Site RAMS/method statements for installation work (if applicable)
- Cyber controls (MFA, backups, segmentation, remote access governance)
- Recall/withdrawal plan evidence if relevant to products/end markets
FREQUENTLY ASKED QUESTIONS
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What is the most common insurance gap in electronics manufacturing?
Underinsured stock/WIP and missing cover for customer-owned goods in custody are very common. Many businesses also discover that BI only triggers on physical damage, while their biggest disruption risk is equipment failure, supplier disruption or cyber/OT events.
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Do I need professional indemnity if I only “lightly” advise customers?
If you design, specify, configure, recommend components, approve substitutions, write control logic, or advise on suitability, PI is often sensible. Public/product liability usually focuses on injury/property damage, while PI addresses financial loss from negligent professional services.
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How do I set the right stock and WIP limits?
Use the maximum value you could reasonably have on site (peak). Include high-value components, buffer stock, and WIP values. If you hold customer-owned components under contract, consider a separate custody limit. If values fluctuate, seasonal/peak uplifts can help.
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Does business interruption cover supplier disruption or chip shortages?
Standard BI usually requires physical damage at your premises. Supplier disruption and shortages often fall outside that trigger. Contingent BI/supplier extensions may help in certain scenarios, but availability and wording vary significantly.
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Is cyber insurance relevant if we don’t store much personal data?
Yes, because manufacturing losses are often operational: ransomware, system failure, ERP/MES outages, and OT disruption. Cyber insurance can cover incident response, restoration and (where included) cyber business interruption, even when personal data exposure is limited.
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What should I send to Insure24 to review my programme?
The quickest way is your current schedule and statement of fact, plus a summary of activities, territories, peak stock/WIP values, any customer-owned goods held, key equipment, and claims/RMA history. We can then highlight gaps and recommend options.