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DISASTER RECOVERY COVER FOR PCB FACTORIES
Why Fire & Flood Losses Are So Severe for PCB Manufacturers
PCB manufacturing is a high-consequence environment when disaster strikes. A fire or flood doesn’t just damage a building — it can destroy specialist plant, contaminate controlled areas, ruin stock and work in progress (WIP), and interrupt production for months while replacement machinery is sourced, installed and requalified. Even when machinery survives, smoke, soot, water and corrosion can make precision processes unreliable and force clean-down, validation and customer re-audits.
Many PCB businesses underestimate their true maximum loss. Peak WIP values, customer-owned prototypes, specialist chemicals, high-value laminates, and the cost of outsourcing capacity during recovery can be significant. The bigger loss often sits in business interruption — missed delivery deadlines, delayed new orders, and cashflow pressure while fixed costs continue.
Insure24 structures factory disaster programmes specifically for PCB operations: buildings and contents, plant and machinery, stock and WIP, specialist cleaning and restoration considerations, and BI that reflects realistic recovery and requalification timelines.
What Does Fire, Flood & Factory Disaster Risk Insurance Cover?
A factory disaster programme is usually built from multiple covers that work together. The core is typically commercial property insurance (buildings and contents) and stock/WIP cover, supported by business interruption. Depending on the operation, it can also include equipment breakdown, goods in transit, customer-owned goods and specialist extensions for additional expenses.
The key is that policies respond to defined insured perils (such as fire, lightning, explosion, storm, flood and escape of water). The detail of wording, sub-limits and deductibles often determines whether a claim outcome is smooth or stressful. We help you structure the programme around how losses actually occur in PCB environments.
Property, Plant, Stock & WIP
- Buildings – factory structure, offices, roof, service yards and external plant (where declared)
- Contents – fit-out, furniture, IT equipment, tools and general contents
- Plant & machinery – specialist PCB production equipment (declared values required)
- Stock – laminates, films, resists, chemicals, components and finished goods (as defined)
- Work in progress – part-processed panels and batches at different production stages
- Customer-owned goods – prototypes or materials held under contract (where included)
Many losses are magnified by how stock and WIP are defined. PCB businesses should ensure WIP is included explicitly and valued realistically at peak, not average.
Business Interruption (BI) & Extra Expenses
- Loss of gross profit during downtime after an insured event
- Increased cost of working – outsourcing, overtime, expedited freight, temporary premises
- Alternative suppliers and emergency subcontracting to protect customer delivery
- Claims preparation – costs to quantify losses (wording dependent)
- Denial of access scenarios in some policies (wording dependent)
- Indemnity period chosen to reflect realistic rebuild, replacement and requalification time
For PCB factories, BI is often the most important cover. Machine lead times, clean-down, process validation and customer audits can extend recovery well beyond a typical 12-month assumption.
Fire Risk in PCB Manufacturing: Where Claims Start
Fire is one of the most severe causes of loss for manufacturing businesses. In PCB factories, fires may originate from electrical faults, overheating equipment, hot works, flammable liquids, chemical storage, dust build-up, battery charging areas, or contractor activities. Even a small fire can cause significant smoke and soot contamination that impacts controlled processes and renders stock/WIP unusable.
A strong submission helps insurers understand your fire protection strategy: building construction, fire detection and alarm systems, sprinklers (if present), fire compartmentation, housekeeping, hot works controls, and separation of chemical storage areas. Better clarity often means better terms, lower deductibles and fewer restrictive warranties.
Common Fire Triggers & Amplifiers
- Electrical faults in distribution boards, machine cabinets and cable runs
- Overheating motors, pumps and extraction systems
- Hot works (welding, grinding, cutting) without robust permit-to-work controls
- Flammable liquid storage and poor segregation
- Contractor works creating ignition sources and temporary hazards
- Battery charging areas and portable power storage
Underwriters typically ask about construction type, fire separation, alarms, extinguishers, hot works, and whether any sprinklers or suppression systems exist.
Why Smoke Damage Matters So Much
- Smoke and soot contamination can impact precision processes and clean areas
- Corrosive residue can damage electronics, control systems and sensitive machinery
- WIP and materials may be impossible to certify after contamination
- Clean-down and validation may be required before production restarts
- BI can extend beyond physical repair due to requalification and customer audit needs
Your policy must treat smoke contamination appropriately and your BI indemnity period should reflect real-world recovery.
Flood, Escape of Water & Storm Damage: The PCB Factory Threat
Water damage is a leading cause of costly claims for industrial businesses. For PCB factories, water can destroy stock and WIP, damage electrical systems, compromise clean areas, and lead to long downtime due to corrosion and the need for drying and validation. Flood can also bring contamination and debris into controlled environments, increasing clean-up complexity.
Flood risk is highly location-specific. Insurers assess flood exposure carefully and often apply higher deductibles or sub-limits for flood compared to fire. It’s important to know your drainage, site elevation, proximity to watercourses, and resilience measures such as raised storage, barriers and shut-off procedures. For escape of water, maintenance and monitoring of pipework and building services can be important.
Where Water Losses Come From
- Surface water flooding during heavy rainfall
- River flooding depending on site location
- Blocked drains and overwhelmed drainage systems
- Escape of water from sprinkler systems, pipework, boilers or building services
- Roof leaks after storm damage or maintenance issues
- Burst pipes during freezing events
Water damage often looks minor initially but becomes severe as corrosion and contamination affect machinery and electrics.
Policy Considerations (Where Disputes Happen)
- Flood deductibles and sub-limits vs your true exposure
- Definitions of storm vs flood vs escape of water (important for claim categorisation)
- Stock and WIP treatment (including contaminated materials)
- Coverage for specialist drying, dehumidification and clean-room restoration
- BI start triggers and whether requalification time is supported
We help ensure wording and declared values reflect the reality of a PCB facility so claim outcomes aren’t derailed by definitions.
Disaster Recovery Planning & Business Interruption: The Make-or-Break Cover
When disaster strikes, the question isn’t only “what was damaged?” — it’s “how quickly can you trade again?” PCB manufacturers often face longer recovery timelines than general manufacturing due to specialist equipment lead times, controlled processes and the need to prove quality and traceability. A factory can be repaired, but customers may require requalification runs, audits and documentation before they accept production again.
That’s why business interruption cover should be built around realistic scenarios: the time to clean, restore, reinstall and revalidate, the speed of supply chain recovery, and the practicality of outsourcing work temporarily. Indemnity periods and limits should reflect the worst-case event, not the most convenient number.
BI Mistakes PCB Businesses Commonly Make
- Choosing an indemnity period too short (12 months by default)
- Understating gross profit or not accounting for fixed costs correctly
- No realistic increased cost of working allowance for outsourcing and expedited freight
- Failing to include requalification/audit delays in recovery planning
- Ignoring single points of failure: one key machine stops everything
- Not reviewing supply-chain lead times for critical materials
BI is there to protect cashflow. If it is structured incorrectly, a business can survive the fire but fail during the recovery.
Practical BI Enhancements to Consider
- Higher indemnity periods for specialist equipment replacement and validation
- Robust increased cost of working to keep customers supplied (outsourcing, overtime)
- Contingent BI options for key supplier dependency (where available)
- Alternative premises planning (temporary production, partner sites)
- Claims preparation support to speed up settlement and reduce admin load
Good BI is not “expensive insurance” — it is a practical recovery tool. We help you evidence why the limits make sense.
PCB Factory Disaster Claim Examples
These examples show how factory disasters typically develop in PCB operations and where different policy sections are relied on. They also highlight why definitions, sub-limits and declared values matter.
Example 1: Electrical Fire & Smoke Contamination
An electrical fault causes a fire in a machine cabinet. The fire is contained, but smoke spreads into production areas. Stock and WIP cannot be certified, and clean-down plus validation is required before work resumes.
- Typical cover: Property/contents + stock/WIP (fire/smoke), specialist cleaning; BI for downtime
- Common gap: WIP not clearly defined or peak values understated
- Recovery driver: time to clean, validate and requalify processes
Example 2: Flooded Storage & Materials Spoilage
Heavy rainfall overwhelms drainage and causes flooding. Raw materials, laminates and packaging in low-level storage are damaged, and certain items absorb moisture or become contaminated. Production slows while materials are replaced.
- Typical cover: Stock under flood peril (subject to deductible/sub-limit); BI if triggered
- Common gap: Flood deductible too high relative to probable loss
- Recovery driver: replacement lead times and rescheduling
Example 3: Escape of Water & Corrosion Damage
A burst pipe leaks overnight and water enters electrical areas. Even after drying, corrosion affects controls and reliability. A staged clean and recommissioning plan is required.
- Typical cover: Escape of water under property policy; reinstatement of damaged items
- Common gap: disputes about what is “damaged” vs what is “maintenance”
- Recovery driver: specialist drying and recommissioning time
Example 4: Major Fire & Long BI Recovery
A severe fire damages part of the factory and key machinery. Replacement equipment lead times and installation extend recovery. The business relies heavily on BI and increased cost of working to outsource work and keep customers supplied.
- Typical cover: Property reinstatement + BI with increased cost of working
- Common gap: indemnity period too short for equipment replacement and validation
- Recovery driver: lead times, requalification and customer audit requirements
Fire & Flood Risk Management Checklist for PCB Facilities
Strong risk controls reduce losses, improve insurer confidence and can lower premiums and deductibles. Insurers typically respond well to clear evidence: documented procedures, maintenance records, contractor controls and practical mitigation. Below is a checklist that reflects what underwriters commonly focus on for PCB factories.
Fire Protection Controls
- Fire detection and alarm system tested and maintained
- Portable extinguishers suitable for electrical and general fire risks
- Hot works permit-to-work system with fire watch and post-work checks
- Good housekeeping and waste management (especially in production areas)
- Segregation of flammable liquids and chemicals in approved storage
- Electrical inspection and maintenance programme for high-load areas
Flood / Water Resilience Controls
- Drainage maintenance and planned inspections
- Raised storage for critical stock/WIP and electrical systems
- Water leak detection and shut-off procedures where practical
- Roof inspections and maintenance, especially after storms
- Site flood plan including barriers, pumps and emergency contacts
- Business continuity plan with supplier alternatives and outsourcing options
Not every control is realistic for every business. The point is to demonstrate awareness, reduce loss likelihood, and show insurers that your operation is managed and resilient. Where you have clean areas, include controls for segregation, filtration maintenance and recovery procedures after incidents.
After a water-loss incident we discovered our BI indemnity period was too short for requalification and customer sign-off. Insure24 rebuilt our programme with realistic values for stock/WIP and a recovery timeline that actually matched how PCB production restarts.
Operations Director, UK PCB ManufacturerFREQUENTLY ASKED QUESTIONS
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Is smoke contamination covered even if the fire damage is small?
Often yes if smoke/soot is treated as physical damage under the policy. The practical question is whether specialist cleaning and stock/WIP impacted by
smoke are properly covered. Policy wording and definitions matter, especially for controlled areas.
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What’s the difference between flood and escape of water?
Flood usually refers to water from outside sources (surface water, rivers, heavy rainfall), whereas escape of water refers to water leaking from fixed
installations such as pipework, tanks, sprinklers or building services. Policies often apply different deductibles and sub-limits.
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How should a PCB manufacturer set the BI indemnity period?
It should reflect realistic recovery time after a major insured event: repairs, equipment replacement lead times, commissioning, clean-down,
validation and customer requalification/audits. Many businesses choose 12 months by default, but longer may be appropriate for specialist plant.
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Does insurance cover the value of work in progress (WIP)?
It can, but WIP needs to be clearly included in definitions and declared values must reflect peak exposure. Underinsurance can trigger average clause
reductions at claim time. PCB manufacturers should be careful to include part-processed panels and batches.
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We hold customer prototypes on-site — can those be insured?
Yes, if your policy includes customer-owned goods / goods held in trust. It’s important to disclose the existence and typical values of customer
property and any contractual obligations you have to protect it.
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How quickly can Insure24 arrange cover for a PCB factory?
Many risks can be quoted quickly once values, construction details and risk controls are clear. Higher values, complex processes, flood exposure or
specialist hazards may require underwriter review. As a guide, allow 1–2 business days once core information is provided.
UNIQUE INSURANCE
TAILORED FOR YOU
Fire and flood events can shut a PCB factory for months — not just due to physical repairs, but due to equipment lead times and the need to requalify processes. Speak to Insure24 to structure a programme that protects buildings, plant, stock/WIP and cashflow during recovery.
PROTECT YOURSELF
- Buildings, contents, plant and specialist equipment cover
- Stock and WIP definitions aligned to PCB processes
- BI cover structured around realistic recovery and requalification time
- Flood and escape of water deductibles reviewed against true exposure
- Support presenting risk controls to underwriters for improved terms