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Precision engineering

Precision Engineering and Metal Fabrication Insurance

Insurance advice for CNC machining, precision engineering and metal fabrication firms, covering critical machines, customer property, tolerances and liability.

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Start with the exposure

Understand the exposure before comparing terms.

Precision work concentrates value in a few machines and a lot of trust in tolerances. A single five-axis centre, a laser or a press brake can be the bottleneck for an entire order book, and customers' tooling and materials sit on your floor. We look at what a failure of workmanship, a defective component or a delayed delivery would mean contractually, and how property, machinery breakdown, liability and product recall wording would or would not respond. This page complements, and does not replace, our wider manufacturing insurance advice.

OAK VIEW

In precision engineering, the loss that hurts is rarely the fire. It is the one machine that cannot be replaced for eight months.

Cover to consider

Built from the risk outwards.

Availability and scope depend on insurer acceptance and the terms offered for your business.

01

Critical machine protection

Property and breakdown cover considered machine by machine, including replacement lead times and the cost of outsourcing work.

02

Customer property

Review of customers' tooling, drawings and materials in your care, which often need express wording.

03

Products and workmanship

Understanding where product liability responds to resulting damage and where defective work itself is excluded.

04

Export and recall

Territorial limits for supplied products and the difference between liability and the cost of recalling parts.

Practical buying guidance

Know which machine, which customer and which clause

List your critical machines by name, value, age and replacement lead time. If one centre carries most of the revenue, its failure matters more than the building's value. Identify whether work could be outsourced during repair, and at what cost, as these facts shape both breakdown and business interruption conversations.

Read customer contracts for tolerance obligations, testing and warranty clauses, and any requirements for insurance limits. Distinguish three things: workmanship that does not meet the drawing, damage caused by a component to something else, and the cost of withdrawing batches from use. Standard liability may respond to the second, but rarely the first or third unless specifically agreed.

Declare customer property, such as free-issue materials, tooling and drawings, and the destinations of exported parts. Where you contribute to a design, treat professional indemnity as a separate discussion from product liability. Our wider manufacturing guidance covers multi-site programmes; this page concentrates on the machine-centred issues of the precision shop.

Compare the wording, not just the premium

Product liability, recall and professional indemnity can each sound like the answer to a defective part, but each responds to a different kind of failure.

For more detail, read Manufacturing insurance: a practical guide for UK makers and engineering firms, Machinery breakdown and business interruption: mapping a manufacturer's recovery and Products liability, design responsibility and recall: three manufacturing exposures.

Common questions

Useful answers before you approach the market.

Does product liability cover a part that fails tolerance?+

Usually not the cost of replacing the part. Liability cover typically responds to injury or damage to other property caused by a product, while defective workmanship and cost of rework are often excluded.

Is design work an issue for machinists?+

If you advise on or change a design, professional indemnity may be relevant, because design faults are often outside standard product liability. Make clear whether you build to print or influence the design.

What happens if a key machine fails?+

Property cover responds to insured damage, while breakdown cover addresses mechanical failure. Business interruption triggers differ, so check whether a breakdown alone starts the claim.

Do exports affect our policy?+

They can. Territorial limits, jurisdiction clauses and North American exposure are frequently restricted or priced separately, so declare where your parts end up.

Programme review

What an underwriter will want to understand

CNC, fabrication and critical machines

Precision shops often depend on a few high-value machines. A five-axis centre or fibre laser may take many months to replace, and the work cannot always be moved. Rank machines by revenue and replacement time, and consider whether subcontract capacity exists during an outage.

Environmental conditions such as coolant, swarf and dust bring fire exposures of their own, and welding or cutting creates hot work. Insurers may ask about housekeeping and fire detection near machines.

  • Machine name, age and value
  • Replacement lead time
  • Outsourcing options and cost
  • Share of revenue per machine

Tolerances, testing and workmanship

A part outside tolerance is a quality failure. Product liability generally responds to injury or damage to other property, not the cost of redoing the part. Testing, inspection and certification records become important evidence when a customer disputes responsibility.

Where you modify or advise on design, professional indemnity may be needed, since design faults are often excluded from product liability. Build-to-print and design-and-build are distinct positions.

Customer property, export and recall

Customers' tooling, drawings and free-issue material in your care may need express cover. Export markets, particularly North America, can affect availability and terms. Product recall, the cost of withdrawing components from the market, is separate from liability and usually requires its own cover.

This page focuses on machine-centred issues; our manufacturing insurance page deals with multi-site programmes and wider interdependencies.

All cover is subject to insurer acceptance, underwriting information and the terms of the policy issued.

Commercial enquiry

Tell Oak about the account.

Give us the outline. We will ask for schedules and documents separately, so please do not send sensitive personal data in this form.

Main business trading/contact address

Enter the UK address where your business trades or can be contacted. This is not automatically the address of the premises you want to insure.

For properties, warehouses, depots and other premises, tell us the actual insured site address separately if it differs. For a large portfolio or fleet of locations, you can ask us to contact you for a schedule instead.

Your business and insurance requirements

Brief estimates, ranges or “unknown” are enough to start. Do not include medical information, claimant or tenant names, bank details, policy numbers or confidential documents. An enquiry does not put cover in place.

Or email info@oak-insurancebrokers.co.uk or call 0330 133 4386.

Related specialisms

Manufacturing insurance

Manufacturing Insurance

Professional risks

Professional Indemnity Insurance

Liability to other people

Public Liability Insurance

Commercial combined insurance

Commercial Combined Insurance

Speak directly to Oak

Talk to Oak about precision engineering and metal fabrication insurance.

Tell us what you do, what needs protecting and when the policy renews. We'll take it from there.

Start an enquiry 0330 133 4386