My Account
We compare specialist engineering & manufacturing insurers
A Straightforward Insurance Checklist for UK Engineering Manufacturers
Engineering and manufacturing businesses face a different risk profile to most other trades. You’re dealing with high-value machinery, complex processes, strict tolerances, skilled labour, hazardous activities (welding, cutting, lifting), and a supply chain that can break at any point. At the same time, client contracts and purchase orders can increase your liability beyond what “standard” insurance assumes.
This guide explains the main insurance covers an engineering manufacturer typically needs — from the legal basics to specialist covers such as machinery breakdown, business interruption, product recall, professional indemnity for design work, and contract works for bespoke projects.
If you want fast, practical advice, call Insure24 on 0330 127 2333 and we’ll help you build the right insurance programme for your activities, contracts and plant.
CALL FOR EXPERT ADVICEGET A QUOTE NOW
The Core Covers Most Engineering Manufacturers Need
Legal & Essential Covers
- Employers’ Liability (legal requirement if you employ staff)
- Public Liability (injury/property damage to third parties)
- Products Liability (claims arising from manufactured goods)
- Property / Buildings & Contents (premises, tools, stock, equipment)
- Business Interruption (loss of gross profit/income following insured damage)
- Commercial Vehicle / Fleet (if you operate vans, HGVs, site vehicles)
Specialist Covers That Often Matter
- Machinery & Equipment Breakdown (electrical/mechanical failure)
- Professional Indemnity (design, specification, advice, calculations)
- Contract Works / Projects (work-in-progress, build/test/commission)
- Goods in Transit (own deliveries or courier exposure)
- Cyber & Data (CAD files, ERP/MRP, ransomware, supplier compromise)
- Legal Expenses (contract disputes, employment disputes, debt recovery)
1) Employers’ Liability Insurance (Usually Mandatory)
If you employ staff in the UK (including apprentices, labour-only subcontractors in some cases, or anyone under your control), you will usually need Employers’ Liability (EL). It protects your business if an employee suffers injury or illness arising out of their work and makes a claim. Engineering environments involve known hazards: machinery, manual handling, welding fumes, noise, vibration, cutting/grinding, lifting operations, and forklift movements — all of which can generate significant claims.
What EL Typically Covers
- Compensation awards and settlements
- Legal defence costs (subject to policy terms)
- Claims for accidents and some occupational diseases
- Cover for multiple premises (as declared)
Insurers will often ask about your risk controls: training, PPE, machine guarding, extraction systems, hot works processes, LOLER compliance, and incident records. Strong controls help with premium and terms.
2) Public Liability & Products Liability
Public Liability (PL) protects you if your business causes injury or property damage to third parties — for example a visitor, client, contractor, or member of the public. For engineering manufacturers, PL exposures include site visitors, delivery drivers, client inspections, and work carried out away from your premises (installation, service, commissioning).
Products Liability is essential if you manufacture, supply, or distribute goods. If a component fails and causes damage or injury, products cover can respond. The bigger your role in design/specification, the more important it is to align products cover with professional indemnity (see section 6).
Typical Manufacturing Liability Risks
- Defective parts causing damage to other property (e.g., leaks, mechanical failure, overheating)
- Injury to users, installers, or third parties
- On-site visits, inspections, and loading bay incidents
- Off-site work: installation, commissioning, repairs and servicing
- Contractual requirements for higher limits and specific wording
Limits of indemnity should reflect your customers and contracts. Supply into major industries (food production, automotive, aerospace, utilities, construction) can require higher limits and careful territorial/jurisdiction settings.
Common Gaps to Avoid
- Assuming product liability covers “own product replacement” where no damage occurs
- Assuming contractual penalties / liquidated damages are covered
- Not declaring exports or work in hazardous territories
- Not disclosing heat work / high-risk processes where relevant
- Not aligning the policy wording to client contract clauses
We help you structure cover and set expectations: liability policies are designed for third-party injury/property damage claims, not pure performance failures or warranty “make good” obligations.
3) Property Insurance (Buildings, Contents, Stock & Tools)
Property insurance protects your physical assets: buildings (if owned), tenant’s improvements, contents, tools, stock, raw materials and finished goods. For engineering manufacturers, the property risk isn’t just “fire and theft.” It can involve high electrical loads, hot works, flammable liquids, dust and fume hazards, and expensive machinery concentrated in one location.
What You Typically Insure
- Buildings (freehold) or landlord’s requirement evidence
- Contents and tools (including workshop equipment)
- Raw materials, WIP and finished stock
- Office equipment, IT and electronics
- Tenant improvements and fit-out
- Theft and malicious damage extensions where appropriate
Correct sums insured matter. Underinsurance can reduce claim settlement. We can help you set realistic values and account for inflation and rebuild costs.
Engineering-Specific Considerations
- Hot works controls (welding/cutting/grinding)
- Electrical inspection regimes (and evidence)
- Extraction systems, dust hazards and housekeeping
- Segregation of flammables and storage controls
- Alarm/CCTV/physical security (especially for high-value metals)
- Sprinklers, fire alarms and maintenance records
These details directly affect insurer appetite, pricing, and any special conditions on the policy.
4) Business Interruption & Loss of Income (Protect Your Cashflow)
Business interruption (BI) is what protects your business when you can’t trade normally due to an insured event. For manufacturers, BI can be more valuable than the property damage payout — because downtime destroys revenue while costs keep going.
BI is commonly arranged on a Gross Profit basis, covering loss of turnover and continuing expenses, plus Increased Cost of Working to help you keep trading (outsourcing, overtime, temporary equipment, alternative premises).
Common BI Triggers
- Fire, flood, storm and escape of water
- Theft and malicious damage (where insured)
- Damage to critical infrastructure at your premises
- Supplier/customer extensions (contingent BI)
- Utilities disruption extensions (where available)
The biggest mistake is choosing an indemnity period that’s too short. Many manufacturers need 18–24 months due to rebuild lead times and machinery procurement.
BI Must Match Your Reality
- Do you rely on one “key machine”?
- Can you outsource production quickly?
- What are your lead times for replacement parts?
- Do customers tolerate delays, or do you lose orders?
- Do you have seasonal peaks or contract milestones?
We help set sums insured using realistic turnover and gross profit rates — reducing underinsurance risk and smoothing claim handling.
5) Machinery & Equipment Breakdown (The “Silent Killer” of Production)
Standard property insurance is usually about external events like fire or flood. But manufacturing often stops due to internal breakdown: motors fail, drives burn out, hydraulic systems collapse, compressors seize, chillers fail, PLC faults shut automation down.
Machinery & equipment breakdown insurance (often called engineering breakdown) can cover sudden and unforeseen mechanical or electrical failure — including repair or replacement costs, and when structured properly, downtime losses via BI extensions.
What It Can Cover
- Repair/replacement after sudden mechanical or electrical failure
- Emergency call-outs and labour (subject to policy terms)
- Express freight / overtime to speed repairs (optional)
- Arcing/short-circuit damage and motor burnout (where included)
- Downtime BI extension (when packaged correctly)
This is particularly important if you have high-value CNC machinery, presses, laser/plasma cutters, compressors, chillers, packaging lines or site utilities.
What It Usually Doesn’t Cover
- Wear and tear / gradual deterioration
- Known defects not addressed
- Poor maintenance
- Consumables unless damaged by an insured event
- Cyber-caused shutdown unless insured separately
The fix is not “hope.” It’s aligning maintenance records and policy wording so you have a reliable response when a real breakdown occurs.
6) Professional Indemnity (If You Design, Specify or Advise)
Many engineering manufacturers do more than “make parts.” You may produce drawings, prototypes, calculations, design changes, material specifications, performance advice or integration support. The moment you provide professional services, you can face claims for design/specification errors that cause financial loss — even if there’s no injury or property damage.
Professional Indemnity (PI) helps protect against allegations of professional negligence. It’s also commonly demanded by clients in engineering, aerospace, automotive, utilities and construction supply chains.
When PI Is Usually Needed
- You design bespoke parts, machinery or systems
- You provide calculations, drawings or CAD models
- You advise on materials, tolerances or performance
- You modify client designs and sign-off changes
- You provide commissioning, testing or integration advice
PI claims can be expensive because they often involve disputes, expert evidence, and potentially large downstream losses.
How to Improve PI Terms
- Document control and change management
- Signed scope of work and clear assumptions
- Testing/acceptance procedures
- Quality assurance records and traceability
- Contract review of fitness-for-purpose obligations
We help you present your risk management clearly to insurers to secure better pricing and broader wording.
7) Contract Works / Projects Cover (Work-in-Progress & Bespoke Jobs)
If you work on bespoke projects, prototypes, one-off machinery builds, or installations, you may need contract works cover for work-in-progress (WIP), materials, and project value during build/test/commission phases. This is especially important where you hold expensive items on-site for a client or where contract terms make you responsible until handover.
Typical Contract Works Needs
- WIP and materials for ongoing projects
- Client-owned items in your custody (where insurable)
- Testing and commissioning extensions (where included)
- Transit and temporary storage (subject to underwriting)
- Hired-in plant and tools used on projects
This can sit alongside property cover or be structured as a project policy depending on contract requirements and risk profile.
Other Covers to Consider
Depending on your activities, contracts and supply chain, these additional covers can be extremely valuable. The right choice depends on your exposure, not what a generic package policy includes.
Goods in Transit & Stock Away From Premises
- Protection for high-value components while being delivered
- Cover for theft/damage in transit (own vehicles or courier)
- Extensions for temporary storage or third-party premises
Cyber, Legal Expenses & Management Risks
- Cyber: ransomware, ERP/MRP downtime, CAD file compromise, supplier attacks
- Legal Expenses: contract disputes, employment disputes, debt recovery
- Management Liability: directors’ & officers cover for corporate risks
These covers are increasingly relevant where manufacturers rely on digital systems, automation, and strict contractual performance.
How Insure24 Quotes Engineering Manufacturing Insurance
The fastest way to get the right cover (and the right price) is to align insurers with your exact activities. Engineering manufacturing varies massively: a precision CNC shop has a different profile to a heavy fabrication company, and both differ from a bespoke machinery builder with installation work.
What Insurers Typically Ask
- Turnover split (manufacturing vs design vs installation/service)
- Products supplied and typical end-use industries
- Largest contract value and contract terms used
- Premises details, construction, protections and housekeeping
- Machinery values, age profile and maintenance records
- Claims history and risk improvements implemented
What We Do Differently
- Translate your operations into clear underwriting language
- Spot gaps created by contract clauses and warranties
- Build the insurance “stack” (PL/Products + PI + BI + Breakdown)
- Ensure sums insured and indemnity periods are realistic
- Support evidence of insurance and contract-ready certificates
The outcome: cover that actually responds when you need it, not a cheap policy that surprises you later.
FREQUENTLY ASKED QUESTIONS
+-
What insurance is legally required for an engineering manufacturer in the UK?
Employers’ Liability is usually legally required if you employ staff. Other covers (public/products liability, property, business interruption, machinery breakdown, PI) may not be legally mandatory but are commonly required by contracts, landlords, and customers.
+-
Do I need products liability if I only make components?
Usually yes. Even small components can cause serious damage or injury if they fail in service. Products liability covers claims for third-party injury or property damage arising from goods you manufacture or supply, subject to policy terms and exclusions.
+-
When do engineering manufacturers need professional indemnity?
If you design, specify, advise, provide drawings/CAD, calculations, prototypes, or integrate systems, PI is often essential. It helps protect against claims alleging professional negligence (design/specification errors) that cause financial loss, even where there is no injury or property seen.
+-
What’s the difference between property insurance and machinery breakdown?
Property insurance usually covers external perils like fire, flood, storm and theft. Machinery/equipment breakdown covers sudden internal mechanical or electrical failure (motor burnout, arcing, hydraulic failure, compressor seizure, control faults) which may not be insured under standard property policies.
+-
How do I choose the right business interruption indemnity period?
The indemnity period should reflect worst-case recovery time, including rebuild works, machinery lead times, commissioning/calibration, and time to regain normal trading. Many manufacturers need 18–24 months rather than 12 months, depending on machinery and supply chain reliance.
+-
Can Insure24 help match insurance to customer contract requirements?
Yes. We can help align limits, territorial/jurisdiction settings, and evidence of insurance to contract requirements and highlight clauses that commonly create gaps (fitness for purpose, uncapped liability, broad indemnities, and liquidated damages).