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Why Exclusions Matter More Than the Headline Cover
Most medical device manufacturers focus on limits — £5m, £10m, £20m — but the real risk often sits in exclusions, endorsements and gaps between policies.
A software-driven defect, for example, might be excluded under Product Liability as “pure financial loss”, not fully picked up by PI due to contract wording, and not covered by Recall because the trigger definition is too narrow.
This page highlights the most common exclusions and structural gaps we see — and how to address them proactively.
Common Product Liability Exclusions
1️⃣ Recall / Withdrawal Costs
- Cost to recall or replace your own devices
- Field corrective action logistics
- Notification and crisis management costs
These costs require separate Product Recall / FSCA insurance.
2️⃣ Pure Financial Loss
- Loss of revenue
- Contractual performance claims
- Downtime losses where no injury/property damage occurred
These are typically handled under Professional Indemnity / Technology E&O.
3️⃣ Known Defects / Prior Circumstances
- Issues known before policy inception
- Failure to disclose material facts
- Pre-existing complaints
4️⃣ Contractual Liability Assumed Beyond Common Law
- Indemnities wider than standard legal liability
- Penalty clauses and liquidated damages
Procurement contracts often extend liability beyond policy assumptions.
Common PI / Technology E&O Gaps
Bodily Injury Exclusion
- Some PI policies exclude bodily injury entirely
- May conflict with product liability wording
Contractual Performance Clauses
- Service level guarantees
- Fitness-for-purpose warranties
- Uninsurable penalty clauses
Common Recall / FSCA Policy Gaps
Trigger Definition Issues
- “Imminent bodily injury” wording too restrictive
- Exclusion of purely financial defect corrections
Software & Cyber-Driven Events
- Firmware patches not clearly included
- Cyber vulnerability remediation excluded
Common Cyber Policy Gaps
- No cover for operational field corrections
- Dependent business interruption limitations
- Territorial limits for US claims
- War / infrastructure exclusions
Cyber policies are not recall policies — and recall policies are not cyber policies. Coordination is critical for connected devices.
How Insure24 Reduces Policy Gaps
We review your:
- Device type and risk classification
- Software and connectivity profile
- Customer contracts and indemnities
- Distribution territories (UK, EU, US, global)
- Recall and incident response processes
Then we align Product Liability, PI/E&O, Recall and Cyber wording to minimise grey areas and improve claims clarity.
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FREQUENTLY ASKED QUESTIONS
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Why are recall costs excluded from Product Liability?
Product Liability is designed to respond to third-party injury/property damage claims, not the cost of withdrawing your own products.
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Can contractual indemnities invalidate cover?
If you assume liability beyond standard legal liability, policies may not automatically respond unless endorsed.
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Are software-driven recalls covered automatically?
Not always. Definitions of “defect” and “recall” must explicitly include firmware and software-driven events.
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How can we reduce coverage gaps?
Through coordinated policy wording, contract review and proactive underwriting presentation.
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Does Insure24 specialise in MedTech risk?
Yes. We structure insurance programmes specifically for medical device manufacturers.