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SPECIALIST INSURANCE FOR MEDICAL PRECISION ENGINEERING
Medical & Surgical Engineering: High Precision, High Responsibility
Medical and surgical manufacturing is not “standard engineering”. Even where a component is physically small, the potential downstream impact can be huge. Surgical instruments, implantable components, orthopaedic assemblies, device housings, and clean critical parts often sit inside regulated supply chains with strict quality requirements, traceability expectations, and contract-driven liabilities.
If you’re a precision engineering manufacturer supplying the medical sector, you may face risks that include: defective or out-of-tolerance parts, sterility/cleanliness allegations, design or specification disputes, product recall or rectification actions, export/jurisdiction exposures, and costly interruptions if a critical CNC, EDM, grinding or inspection capability goes down.
Insure24 helps UK precision engineering businesses arrange insurance designed around medical-sector realities — with clear, practical advice on what’s covered, what’s not, and how to present your risk properly to insurers.
Who Needs Medical & Surgical Precision Engineering Insurance?
This cover is relevant for precision engineers and contract manufacturers involved in medical, surgical, dental, laboratory, and healthcare device supply chains. That can include build-to-print CNC machining, micro-machining, EDM, grinding, polishing, finishing, assembly, and specialist subcontract processes.
Typical activities we see in this sector include:
- CNC machining of medical device parts (titanium, stainless, cobalt-chrome, PEEK, polymers)
- Surgical instrument manufacture (cutters, retractors, clamps, handles, tool components)
- Orthopaedic and implant component manufacture (where permitted and within your scope)
- Medical device housings, enclosures, frames and assemblies
- Prototype and low-volume precision engineering for R&D and product development
- Finishing operations: polishing, passivation, anodising/coating via approved suppliers
- Clean/controlled handling, packaging and traceability processes
- Inspection and measurement services (CMM, optical inspection, surface roughness measurement)
Why this sector is underwritten differently
Medical and surgical supply chains are often treated as higher sensitivity because of patient safety implications, stricter documentation requirements, and the potential for claims to involve multiple parties (OEM, distributor, hospital/clinic, end user). Even if you only make a component, you may still face allegations relating to tolerances, surface finish, material conformity, or traceability.
The right insurance programme focuses on: accurate business description, clear design responsibility (build-to-print vs design input), correct territories, suitable limits, and realistic management of “rectification/recall” style costs that standard liability policies may not automatically cover.
Key Risks in Medical Precision Engineering
Medical manufacturing risk isn’t just “fire and theft”. The biggest exposures often come from quality, liability and contract-driven issues. Insurers typically want to understand what you produce, how it is used, and what would happen if something goes wrong.
Quality / Conformity Risk
- Out-of-tolerance components and dimensional drift over production runs
- Surface finish, burrs, sharp edges or micro-cracks causing performance issues
- Material conformity errors: wrong grade, incorrect heat treatment, non-conforming certificates
- Contamination allegations: oils, particulates, residue, packaging contamination
- Batch traceability failures (especially where lots must be isolated or recalled)
- Subcontract process failures (coating, passivation, heat treat) impacting performance
Liability & Contract Risk
- Product liability claims (injury/property damage) alleged to arise from defective components
- Professional indemnity exposures where you provide design input, tolerancing advice or sign-off
- Warranty/indemnity obligations in OEM contracts and supplier onboarding terms
- Costly dispute scenarios: “was it the part, the design, the installation, or the operating conditions?”
- Export exposure: overseas jurisdictions, distributors, US exposure (where applicable)
- Confidentiality/IP risk: customer drawings, prototypes and sensitive specifications
Operational Downtime Risk
Precision engineering relies heavily on specialist equipment: CNC mills/turning centres, EDM, grinding, metrology, CMM, tool presetters, and controlled finishing/clean handling. A single machine failure can halt production, trigger late delivery, and risk contract penalties or lost business. That’s why a manufacturing insurance programme often needs machinery breakdown and business interruption considered together.
What Insurance Cover Do Medical Precision Engineers Typically Need?
The right mix depends on what you manufacture, your role in the supply chain, and whether you provide design or advisory services. Below are the covers commonly considered for medical and surgical precision engineering businesses.
Public & Product Liability
Product liability is a core requirement for medical supply chains. It typically responds to claims alleging that a defective product/component caused third-party injury or property damage, and usually includes legal defence costs (subject to policy terms).
- Best for: injury/property damage allegations linked to your products
- Important: territory/jurisdiction (UK/EU/Worldwide), end-use, safety-critical applications
- Watch-outs: “your product/your work” exclusions; pure financial loss; contract penalties
Public liability is also important for premises risk: visitors, customers, suppliers, and third-party property damage at your site.
Professional Indemnity (Design / Specification)
If you provide design input, tolerancing advice, prototyping sign-off, engineering consultancy, or modify customer drawings/specifications, professional indemnity becomes highly relevant. PI is designed to cover claims alleging professional negligence, often involving financial loss and rectification costs (subject to wording and scope).
- Best for: design errors, specification mistakes, CAD/version control issues, negligent advice
- Key items: retroactive date, scope of services, contractual liability clauses
- Common gap: if you “also design” but the policy is placed on a manufacture-only basis
Product Recall / Rectification (Specialist)
Standard liability policies may not automatically cover recall logistics or the cost of retrieving and replacing products. Specialist recall/rectification extensions may be available depending on your products, volumes and controls.
- Can help with: notifications, retrieval, logistics, disposal and some rectification activity (policy-dependent)
- Often requires: strong QA, traceability, documented containment processes
- Not always available: depends on insurer appetite and medical product profile
If you manufacture parts that go into high-volume distribution, this is a key conversation.
Property, Stock & Business Interruption
Property insurance protects buildings (if owned), contents, plant, fixtures, jigs, tooling and stock against insured events like fire, flood, storm and theft. Business interruption (BI) can protect your gross profit and help cover increased costs of working while you recover.
- Key factor: indemnity period (how long you need to recover)
- Consider: increased cost of working (overtime, alternative machining capacity)
- Dependencies: single points of failure and lead times for replacement equipment
For many precision engineers, BI is where the real financial protection sits — because downtime is expensive.
Machinery Breakdown & Engineering Inspection
Machinery breakdown can cover sudden and unforeseen mechanical or electrical failure of insured plant, subject to policy terms and maintenance expectations. When paired with BI, it helps protect cashflow while repairs are completed.
- Useful for: CNC breakdown, spindle failure, control system faults, EDM issues, compressor failure
- Consider: breakdown-related BI (if available), parts availability and service contracts
- Also relevant: statutory inspection requirements where applicable (e.g., certain lifting equipment)
Cyber & Data (For Medical Supply Chains)
Medical supply chains can involve sensitive design files, CAD data, and customer information, plus increasing reliance on ERP/MRP and machine control systems. Cyber incidents can cause disruption, data loss, ransom scenarios, and supplier scorecard failures.
- Can help with: incident response, business interruption from cyber events, data recovery (policy-dependent)
- Key factor: backups, MFA, access controls and supplier cybersecurity requirements
Even if you don’t hold patient data, you may hold commercially sensitive design data and critical production systems.
What Affects the Cost of Medical Precision Engineering Insurance?
Pricing is driven by exposure and control. Insurers are typically looking at what you manufacture, how it is used, what could go wrong, and how robust your systems are to prevent/contain problems.
- Products and end-use – instruments vs implant components vs device housings; safety-critical exposure
- Territory – UK/EU/Worldwide (and whether US exposure is present)
- Turnover and largest contract – concentration risk with major OEMs
- Design responsibility – build-to-print vs design-and-build vs design input
- Quality system maturity – documented controls, inspection stages, calibration, traceability
- Claims history – frequency/severity and how issues were addressed
- Premises protections – fire protection, security, housekeeping, separation of hazards
- Machinery values – CNC fleet value, specialist equipment replacement lead times
What insurers like to see
- Traceability by batch/lot, retained inspection records and material certificates
- Calibration schedules and documented control of measuring equipment
- Version control for CAD/drawings and change approval workflows
- Containment plans: how you isolate and investigate non-conforming product
- Supplier/subcontract control for specialist processes (coating, heat treat, passivation)
- Clear contract scope defining what you are responsible for (and what you are not)
We help you present these in an insurer-friendly way, without creating unnecessary admin burden.
How to Get a Quote (What We’ll Ask For)
Medical manufacturing can be quoted quickly when the key facts are clear. We focus on the questions underwriters actually use to assess risk, so you’re not stuck in endless back-and-forth.
- A clear description of what you manufacture and whether you assemble finished products
- Where products are sold/used (UK/EU/Worldwide) and whether any US exposure exists
- Turnover, largest customer concentration, and maximum contract values
- Whether you provide design services, tolerancing advice or prototype sign-off
- Quality controls: inspection stages, traceability, calibration, certificates
- Any recall/rectification history or significant quality events
- Premises details: protections, security, fire precautions, storage of flammables/coolants
- Machinery values and any single points of failure (critical CNC/CMM)
Fast-track tip
If you have an OEM supplier onboarding pack, contract insurance requirements (limits/territories), or a typical QA overview, share it with us. It helps us place cover that aligns with the real contractual environment you operate in.
We can also help you avoid common mismatches — for example, when a business is described to insurers as build-to-print only, but in practice also provides design input or engineering sign-off. Those mismatches are where claim disputes can start.
We supply medical device OEMs and needed a policy that matched contract requirements and overseas distribution. Insure24 made it clear what PL covered, where PI was needed, and helped us evidence our QA controls to insurers.
Director, UK Precision Engineering ManufacturerFREQUENTLY ASKED QUESTIONS
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Do medical precision engineers need product liability insurance?
In most cases, yes. If you manufacture or supply parts used in medical or surgical devices, product liability is usually a core requirement. It is designed to respond to third-party injury or property damage allegations caused by defective products, subject to policy terms, limits and exclusions.
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What’s the difference between product liability and professional indemnity?
Product liability is mainly for injury/property damage caused by products. Professional indemnity is mainly for professional negligence, such as design mistakes, specification errors or engineering advice. If you provide design input, tolerancing advice, prototyping sign-off or modify drawings/specifications, PI may be important alongside product liability.
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Does product liability cover the cost of remaking defective parts?
Often not. Many product liability policies focus on third-party injury or damage beyond the product itself. The cost of rework, replacement or rectifying your own defective work may be excluded unless a specialist extension applies. We’ll explain the likely gaps before you buy cover.
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Can I insure product recall or rectification costs?
Sometimes. Recall/rectification cover may be available for certain medical supply chain risks, but it’s often specialist and depends on product type, volumes, distribution, and the strength of QA and traceability controls. It is not always included as standard, so it must be discussed and underwritten properly.
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How do insurers view overseas distribution (EU/Worldwide/USA)?
Territory and jurisdiction are major rating factors. If your products are exported or integrated into overseas supply chains, you must ensure the policy territory and jurisdiction clauses match the real risk. Some markets treat US exposure differently. Tell us where goods go (and whether any US risk exists) so we can place cover appropriately.
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What insurance helps if a critical CNC machine breaks down?
Machinery breakdown insurance can cover sudden and unforeseen mechanical or electrical failure of insured plant (subject to policy terms), and business interruption can protect loss of profit while you recover after an insured event. For precision engineering businesses with high dependency on specific machines, structuring breakdown and BI properly is often essential.
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What information do you need to quote?
We typically need: what you manufacture, end-use and industries served, turnover and largest contract, territories (UK/EU/Worldwide), whether you do design/advice, a summary of QA/traceability controls, claims history, premises protections, and machinery/stock values. If you have contract insurance requirements from OEMs, share them too.
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How quickly can Insure24 arrange cover?
Many precision engineering risks can be quoted quickly once key details are clear. Specialist elements (like recall/rectification, higher territories or complex contractual clauses) may require additional underwriting review, but we aim to progress matters promptly and keep the process straightforward.
Important: This page provides general information only and does not constitute advice. Cover is subject to insurer underwriting, policy terms, conditions and exclusions. Speak to Insure24 for a tailored quotation based on your activities and contracts.