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FAB INSURANCE THAT PROTECTS PRECISION MANUFACTURING
Why Semiconductor Fab Insurance Is Critical
Semiconductor fabrication facilities represent some of the most capital-intensive and technically complex manufacturing environments in the world. A single contamination event, lithography tool failure, power fluctuation, or chemical incident can halt production and cause multimillion-pound losses within hours. Standard manufacturing insurance is rarely sufficient for fabs. Specialist cover is essential.
Property & Cleanroom Insurance
Fab environments rely on ultra-clean ISO-classified cleanrooms, precision HVAC systems, raised flooring, and contamination control infrastructure. Damage to these environments can shut down production instantly.
- Cleanroom reinstatement costs
- Air handling & filtration systems
- Raised access flooring
- Contamination & particulate events
- Fire suppression & gas systems
- Power surge & voltage fluctuation damage
- Chemical storage and wet bench areas
- Explosion & fire risk in process areas
High-Value Equipment & Tool Breakdown
Semiconductor fabs depend on extreme precision tools including EUV/DUV lithography systems, ion implantation machines, deposition chambers, etching equipment and metrology tools. Replacement costs can exceed £100 million for a single tool.
- Mechanical & electrical breakdown
- Vacuum system failure
- Robotics & automation malfunction
- Process control system errors
- Cooling system breakdown
- Accidental damage during maintenance
- Transit & installation risk
- Calibration & precision alignment damage
Yield Loss, Scrap & Contamination Risk
Semiconductor manufacturing is highly sensitive to micro-contamination, chemical imbalance, humidity variation and process instability. Yield degradation may not be immediately visible but can result in large-scale scrap batches.
- Batch contamination
- Defective wafer runs
- Photoresist process failures
- Chemical supply chain contamination
- Environmental control malfunction
- Unrecoverable WIP (work in progress)
- Recall of defective semiconductor lots
Product Liability & Recall Insurance
Defective semiconductor components can cause catastrophic downstream losses in automotive systems, aerospace electronics, medical devices and industrial automation.
- Failure in mission-critical electronics
- Automotive component liability
- Medical device chip failure
- Recall & replacement costs
- Contractual liability exposures
- Global distribution risk
Business Interruption & Supply Chain Risk
Fab downtime is extremely costly. A 48-hour outage can result in millions in lost output and delayed contractual delivery penalties.
- Gross profit loss following insured damage
- Utility interruption (power, water, gas)
- Dependent supplier interruption
- Equipment lead time delays
- Contingent business interruption
- Extra expense to mitigate downtime
Following a contamination incident, Insure24 structured a bespoke fab insurance solution that protected our revenue and funded rapid cleanroom reinstatement.
Operations Director – UK Wafer Fabrication PlantCompliance & Regulatory Considerations
Semiconductor fabrication plants must comply with stringent safety, environmental and export regulations.
- UK environmental regulations
- Hazardous chemical storage laws
- Export control compliance
- Health & safety regulations
- Pollution & environmental liability
FREQUENTLY ASKED QUESTIONS
What is Semiconductor Fabrication Insurance?
It is specialist insurance designed to protect wafer fabrication plants and semiconductor manufacturing facilities against high-value equipment damage, contamination, liability, and business interruption risks.
Why can’t I rely on standard manufacturing insurance?
Standard policies often exclude contamination, high-value tool breakdown, yield loss and extended supply chain interruption risks specific to semiconductor fabs.
Does it cover EUV lithography systems?
Yes, subject to underwriting approval. Policies can be structured to cover high-value lithography, deposition and etch tools including installation and calibration risks.
Is yield loss covered?
Yield loss may be covered if resulting from insured physical damage or contamination events. Pure process inefficiency is typically excluded.
How much does fab insurance cost?
Premiums depend on facility value, equipment schedule, cleanroom classification, turnover, safety controls and loss history. Most policies are individually underwritten.
Does cover include global exports?
Yes, worldwide product liability and recall cover can be arranged, including North American exports.