Insurance for Electronic Components Manufacturing Companies

Electronic components are the building blocks of modern life. Companies in the electronic components manufacturing space play a vital role in global supply chains but also face serious risks. Whether your operation specializes in wiring, meters, control boards, or integrated modules, one faulty part can disrupt entire systems and lead to costly claims.

The right insurance policy is just as important as having the right prototype or assembly. Electronic components manufacturing companies need tailored insurance solutions that address the industry’s unique exposures. 

In this blog, Rachel Pinsonneault—commercial lines staff underwriter at Central Insurance—outlines some of the coverages most important to help your business operate safely and sustainably.

Why Risk Management Matters in Electronic Components Manufacturing

Consumer demand for electronic components is higher than ever due to fast-paced technology with smartphones, laptops, and more. However, advanced features mean increased risk and more complications. 

As Pinsonneault explains, integrating electronic component manufacturers’ products into broader systems contributes heavily to their unique liability risks.

“If something fails in the electrical system, it can absolutely destroy someone else’s property,” she says. “It’s not just about your product failing, but what else is affected when things go wrong.”

Many manufacturers produce parts based on another company’s specifications, which adds another layer of risk: if the end result doesn’t perform correctly or fails due to quality issues, the manufacturer can still be liable.

In addition to product performance, businesses in this sector have the added complexity of:

• Meeting safety standards and compliance across varying voltage levels
• Protecting high-value equipment in a production environment
• Avoiding workplace injuries tied to machinery or repetitive tasks

Given this wide scope of exposure, a comprehensive insurance strategy is crucial.

Essential Insurance Policies for Electronic Components Manufacturers

The following core coverages can help protect your company from financial and operational fallout if the unexpected occurs:

1. Commercial Property and Equipment Breakdown Insurance

Your machinery, raw materials, and finished inventory are the backbone of your operation. Commercial property insurance can cover these assets from damage due to fire, theft, and natural disasters like wind or hail. 

“Machinery is key,” Pinsonneault says. “It’s what they use to make their products. That’s why breakdowns can bring production to a halt.”

2. Product Liability Insurance

When a component fails and causes injury, fire, or extensive damage to an end user’s product, your company may be liable—even if you didn’t build the final assembly. Product liability insurance generally covers legal defense costs, settlements, and claims tied to bodily injury or property damage.

Pinsonneault emphasizes the importance of this coverage for electronic manufacturers.

“These products often become part of something else—so when they go wrong, the consequences are amplified,” she says.

3. Workers’ Compensation Insurance

The electronic components industry employs over 1 million people globally. Whether soldering intricate circuits or lifting boxes of parts, manufacturing employees face physical risks daily on the job. Workers’ Compensation helps cover medical expenses, lost wages, and rehabilitation if a worker is injured on site.

According to Pinsonneault, even companies with light assembly tasks shouldn’t overlook this essential form of coverage. “If they’re using machines or doing any installation in the field, that exposure is there, so you want to make sure you’re protected.”

4.  Premises Liability Insurance

Premises liability protects your operation from claims not directly tied to your product. For example, if a vendor slips and falls while touring your facility or a visitor claims damage to their property, this coverage can help cover damages you may owe to them as well as legal and medical costs.

5. Cyber Liability Insurance 

Cyber liability insurance may also be worth considering if your operation relies on connected devices, cloud platforms, or sensitive customer data. As digital systems become more embedded in manufacturing, cyber attacks pose a growing risk to productivity and brand reputation.

Matching Protection to Your Operation

Not all electronic component manufacturers are the same. Some serve niche sectors with custom orders and tight quality controls; others create mass-market parts distributed across industries. No matter your size or specialty, the risks are real. Having the right coverage can protect what you’ve worked hard to build.

Pinsonneault notes that, as a manufacturer, “you’re one cog in a very complex machine. That’s why the right insurance plan matters—the ripple effects of something going wrong can be big.”

The Central Difference

Quality control affects everything in the electronic components manufacturing industry, from business operations to the right insurance. 

Central Insurance has been protecting manufacturers for more than 145 years. Our underwriting team understands the demands of the electronic components manufacturing sector and can help you find the right blend of policies to support compliance, minimize exposure, and strengthen your resilience.

With an “A” (Excellent) rating from AM Best, responsive claims support, and a deep understanding of manufacturing operations, Central is a trusted partner you can rely on.

Find an agent near you to start a customized quote for your electronic components manufacturing operation.