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Construction Engineering Insurance for Factory Moves: Machinery Movement Insurance Planning
Introduction: factory moves are engineering projects, not just logistics
Moving a factory is one of the highest-risk periods in the life of a business. You’re not only transporting expensive machinery—you’re disconnecting, lifting, shifting, re-installing, re-commissioning, and often modifying systems under time pressure.
That mix of heavy engineering work, multiple contractors, and tight deadlines creates a perfect storm of exposures: accidental damage, breakdown during testing, third-party injury, property damage at both sites, delays, and contractual disputes.
That’s where construction engineering insurance and machinery movement insurance planning come in. The goal isn’t “buy a policy and hope.” It’s to build an insurance plan that matches the method statement, the equipment values, the project timeline, and the contract structure.
This guide breaks down the risks, the cover types, and a practical planning checklist so you can move machinery with confidence.
What is machinery movement insurance (and what it isn’t)
“Machinery movement insurance” is often used as a catch-all phrase. In practice, it usually refers to one (or a blend) of the following covers:
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Erection All Risks (EAR) or Contractors’ All Risks (CAR) extensions for dismantling, transit, installation, and testing
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Marine cargo / transit insurance for the transport leg
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Contract works insurance for temporary works, rigging, and installation activities
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Machinery breakdown / engineering inspection for commissioning and operational testing
It’s not the same as:
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A standard property policy (which may exclude “in transit” and “work being performed”)
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A haulier’s limited liability (which is not full-value insurance)
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A generic “goods in transit” policy that doesn’t contemplate lifting, jacking, skidding, or commissioning
The right solution depends on the scope: are you moving a single machine, a production line, or an entire plant including utilities, racking, and control systems?
Why construction engineering insurance matters during factory moves
Factory moves sit at the intersection of construction, engineering, and logistics. That means the risk profile changes by phase:
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Decommissioning & isolation (electrical, gas, steam, hydraulics)
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Dismantling (mechanical separation, removal of guarding, disconnection of services)
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Lifting & handling (cranes, forklifts, gantries, skates, jacks)
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Transit (road risk, loading/unloading, route constraints)
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Installation & alignment (foundations, grouting, levelling, coupling)
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Commissioning & testing (start-up risk, calibration, trial runs)
Construction engineering insurance is designed to respond to accidental physical loss or damage during these phases—when standard policies often have exclusions.
Common risks in machinery movement projects
Here are the exposures insurers and loss adjusters see repeatedly in factory relocations.
1) Accidental damage during lifting and handling
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Dropped loads
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Sling failure or incorrect rigging
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Forklift impacts
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Skidding/jacking failures
Even minor damage can be catastrophic if it affects precision components, bearings, control panels, or alignment.
2) Damage during dismantling and re-installation
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Incorrect disconnection (hydraulics, coolant, compressed air)
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Contamination (dust, moisture ingress)
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Missing parts and poor labelling
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Incorrect reassembly
3) Transit losses and route hazards
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Low bridges, weight restrictions, road vibration
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Poor packaging or inadequate securing
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Weather exposure during loading/unloading
4) Commissioning and testing failures
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Electrical faults on energisation
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Overheating, lubrication failure
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Control system errors
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Damage during trial runs
This is where the difference between “transit cover” and “engineering cover with testing” becomes critical.
5) Third-party liability and property damage
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Damage to landlord property at the old site
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Damage to the new premises during installation
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Injury to visitors or other contractors
6) Delay and business interruption
A move can be “successful” operationally but still financially painful if it causes:
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Extended downtime
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Missed delivery deadlines
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Contractual penalties
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Loss of key customers
Insurance can sometimes help here—but only if the right cover is arranged.
The core insurance covers to consider
A strong machinery movement insurance plan typically combines multiple covers. Below are the most common building blocks.
1) Contractors’ All Risks (CAR) / Erection All Risks (EAR)
Best for: dismantling, installation, and engineering works.
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Covers accidental physical loss or damage to contract works
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Often includes tools, temporary works, and on-site storage
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Can be arranged by the principal (project owner) or the contractor
Key point: EAR is often more suitable when the project is primarily mechanical/electrical installation rather than building works.
2) Transit / marine cargo insurance
Best for: the transport leg between sites.
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Covers loss/damage while in transit
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Can include loading/unloading and temporary storage
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Can be written on “all risks” terms (subject to exclusions)
Key point: don’t rely on the haulier’s liability. Liability is not the same as insurance for your full financial exposure.
3) Public liability and employers’ liability
Best for: injury and third-party property damage.
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Public liability covers third-party bodily injury and property damage arising from the works
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Employers’ liability covers injury to employees (UK legal requirement)
Key point: confirm who is responsible contractually—principal, main contractor, or specialist mover.
4) Professional indemnity (where design/advice is involved)
Best for: engineering design, method statements, lift plans, or project management advice.
If an engineering firm is designing foundations, specifying lifting points, or advising on safe systems of work, PI may be relevant.
5) Machinery breakdown / engineering inspection
Best for: commissioning and operational testing.
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Covers sudden and unforeseen mechanical/electrical breakdown (depending on policy)
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May include inspection requirements for pressure systems, lifting equipment, etc.
Key point: some project policies can extend into testing/commissioning, but the definitions and time limits matter.
6) Delay in start-up (DSU) / advanced loss of profits (ALOP)
Best for: large moves where downtime is a major financial risk.
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Covers financial loss due to delay caused by insured physical damage
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Often requires strong project controls and clear critical path planning
Key point: DSU is not a simple add-on; it’s underwritten carefully and needs accurate financial data.
Who should arrange the cover: principal vs contractor?
There are two common approaches:
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Principal-arranged project policy: the factory owner buys a project policy covering the works and names contractors.
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Contractor-arranged cover: each contractor relies on their own CAR/EAR and liability policies.
In practice, many projects use a hybrid. The key is to avoid gaps and disputes over “whose policy should respond.”
Practical tip
Ask for a clear insurance responsibility matrix in the contract pack:
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What is insured (equipment, temporary works, existing property)
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Where it is insured (old site, transit, new site)
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Who insures it (principal vs contractor)
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Policy limits, deductibles, and key exclusions
Critical policy details that make or break a claim
Two policies can look similar on a schedule but behave very differently at claim time. These are the details to focus on.
Sum insured and valuation basis
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Replacement cost vs market value
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Inclusion of freight, duties, installation, calibration
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Correct values for high-value components (CNC spindles, control cabinets, robotics)
Underinsurance can trigger average clauses, reducing claim payments.
Testing and commissioning definitions
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When does “testing” start?
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Is hot testing covered?
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Is there a time limit (e.g., 14/30 days) after completion?
Existing property and surrounding property
If you’re installing machinery into an existing building, confirm cover for:
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Damage to the building and fixed services
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Damage to existing plant not part of the move
Off-site storage and layovers
Moves often involve temporary storage. Confirm:
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Locations covered
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Security requirements
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Maximum duration
Exclusions to watch
Common exclusions that can catch factory moves include:
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Gradual deterioration, wear and tear
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Faulty workmanship/design (and whether resultant damage is covered)
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Electrical/mechanical derangement without physical damage
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Unexplained disappearance
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Inadequate packing or securing
Deductibles (excess) and split deductibles
Some policies apply different deductibles for:
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Theft
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Water damage
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Transit losses
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Testing/commissioning
Make sure the deductible is realistic for your risk appetite.
Risk management: what insurers want to see
The best insurance outcomes start with strong controls. Underwriters typically look for evidence of:
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A detailed method statement and lift plan
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Named competent contractors (riggers, crane operators, electricians)
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Machinery condition reports before dismantling
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Photographic records and serial number lists
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Proper packing, crating, and moisture protection
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Route surveys for abnormal loads
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Clear commissioning plan and OEM involvement where needed
If you can show these, you’ll usually get better terms—and fewer claim disputes.
A step-by-step machinery movement insurance planning checklist
Use this as a practical workflow.
Step 1: map the project scope and phases
Document:
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What is being moved (machine list)
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Where it is now and where it’s going
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Who is doing what (principal, main contractor, specialist movers)
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Timeline and critical path
Step 2: build a machinery schedule with values
For each item:
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Description, make/model, serial number
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Replacement cost (including installation)
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Weight and dimensions
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Special handling requirements
Step 3: identify the high-risk operations
Flag items/activities like:
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Single lifts over a certain tonnage
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Tight access lifts
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Complex disassembly (robotic cells, clean rooms)
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High-voltage energisation
Step 4: review contracts and liability assumptions
Check:
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Who bears risk of loss/damage at each stage
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Indemnities and hold harmless clauses
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Insurance requirements and minimum limits
Step 5: select the insurance structure
Decide whether you need:
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A project EAR/CAR policy
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Separate transit insurance
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DSU/ALOP for downtime exposure
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Extensions for existing property
Step 6: confirm policy triggers and handover points
Define:
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When cover attaches (collection? dismantling start?)
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When cover ends (handover? completion? after testing?)
Step 7: align risk controls with policy conditions
Make sure you can comply with:
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Security requirements
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Hot works permits
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Storage conditions
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Maintenance/inspection obligations
Step 8: plan claims documentation in advance
If something goes wrong, you’ll want:
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Pre-move condition reports
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Photos/videos of packing and loading
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Delivery notes and exception reports
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Commissioning logs
Example scenario: moving a CNC production line
A manufacturer relocates a CNC line from one UK site to another. The line includes:
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CNC machines
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Tool changers and coolant systems
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Control cabinets and networked monitoring
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Overhead extraction and compressed air
Key insurance considerations:
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EAR cover for dismantling, installation, and alignment
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Transit cover for road movement and loading/unloading
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Testing cover for recommissioning, including trial runs
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Existing property extension for damage to the new building during installation
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Liability cover for third-party injury and property damage
Without this structure, a loss during commissioning could fall between “transit ended” and “property cover resumed.”
FAQs: machinery movement insurance for factory moves
Does my standard business insurance cover a factory move?
Usually not fully. Property policies often exclude transit and may exclude damage while work is being performed. You typically need project and/or transit cover designed for the move.
Is the haulier responsible if something is damaged in transit?
They may be liable, but liability is often limited by contract and law. That may be far less than the replacement cost of specialist machinery.
Do we need separate cover for lifting operations?
Often yes—either as part of EAR/CAR or via specialist extensions. Lifting and handling is a major loss driver and should be explicitly contemplated.
What about hired-in cranes and plant?
Contractors usually insure hired-in plant under their own policies, but check contracts carefully. If you’re hiring directly, you may need hired-in plant cover.
Can insurance cover downtime if the move is delayed?
Potentially, via DSU/ALOP, but it typically only responds when delay is caused by insured physical damage. It needs careful underwriting.
How Insure24 can help
Factory moves are complex, and insurance needs to match the engineering reality. Insure24 can help you:
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Review your move plan and identify coverage gaps
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Arrange appropriate construction engineering and transit cover
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Align policy wording with your contracts and project phases
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Make sure testing/commissioning is properly addressed
Call to action
If you’re planning a factory move or relocating high-value machinery, speak to a specialist before work starts. A short insurance review now can prevent expensive gaps later.
Get a quote or advice from Insure24:
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Call 0330 127 2333
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Or request a quote via insure24.co.uk