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INDUSTRIAL EQUIPMENT MANUFACTURING INSURANCE
Why Industrial Equipment Manufacturers Need Specialist Insurance
Industrial equipment manufacturers sit at the sharp end of risk: you build high-value machinery and engineered systems that can cause serious loss if they fail. Beyond the factory, there are complex exposures around product safety, design responsibility, commissioning, and contractual obligations with OEMs and end users. Claims can be high severity — not just for injury or damage, but for rework, downtime, delay, and consequential losses that customers may try to pass back to you.
At the same time, manufacturing operations carry familiar but significant hazards: fire, theft, flood, machinery breakdown, tool damage, stock loss and supply chain interruption. Many businesses discover too late that standard “off the shelf” policies do not match how industrial equipment is designed, built, tested, delivered, installed and supported.
Insure24 helps industrial equipment manufacturers present risk in a way underwriters understand — including processes, QA, testing regimes, contract scope and site controls — so you can access realistic cover options and competitive terms (subject to underwriting).
Typical Claim Triggers in Industrial Equipment Manufacturing
Claims commonly arise where equipment performance, safety or specification is challenged — or where something goes wrong during installation, commissioning or operation. Underwriters want to understand what you manufacture, where it is used, how you test it, and what your contracts say about liability and warranties.
The most frequent triggers include product defects with resultant damage, installation/commissioning incidents, fire or escape of fluids, and contractual disputes following delays.
- Defective Components – Failure of a part causing damage to other property or injury (product liability trigger dependent).
- Commissioning Issues – Errors during testing/hand-over leading to damage, rework or delay disputes.
- Hydraulic / Pneumatic Escape – Leaks causing property damage or injury.
- Fire / Overheating – Electrical faults, overheating, hot works or control failures leading to loss events.
- Tools & Jigs Damage – Specialist tooling damage impacting production timelines.
- Contractual Penalties – OEM delay penalties and liquidated damages (often uninsured; contract review is critical).
Core Covers for Industrial Equipment Manufacturing
Most equipment manufacturers build their insurance programme from multiple policies and extensions. The right structure depends on what you build, where it goes, how it’s installed, and whether you provide design/engineering services.
We help you compare wordings so you can see what is covered, what is excluded, and where you may need specialist extensions.
- Factory / Property & Stock – Buildings, contents, stock, tools, and (where applicable) customers’ goods.
- Business Interruption – Loss of gross profit / increased cost of working following insured damage at your premises.
- Product Liability – Injury or property damage caused by products you manufacture/supply (territories and exports matter).
- Public Liability – Premises and operational liabilities, including visitors and certain on-site work.
- Employers’ Liability – Legal requirement in most cases for injury/illness to employees.
- Professional Indemnity – Design/specification risk (key for engineered equipment and performance guarantees).
Specialist Extensions Equipment Manufacturers Often Need
Industrial equipment risk often sits in the grey areas between policies: contract obligations, installation exposure, testing, transit, and projects. Specialist extensions can be available but are heavily wording-dependent and underwritten on your risk controls and project profile.
The goal is to align cover with how your business actually operates — not how generic manufacturing policies assume you operate.
- Products Completed Operations – Critical for exports and high-risk end-use sectors (wording dependent).
- Testing & Commissioning – Extensions relating to trial runs, handover and commissioning exposures.
- Goods in Transit / Marine Cargo – High-value machinery and components moving by road/sea/air.
- Tools & Specialist Equipment – Cover for jigs, fixtures and portable tools off-site (where applicable).
- Contractual Liability – Narrow extensions for certain assumed liabilities (often limited; contract review still essential).
- Cyber & OT – For connected machinery, remote monitoring, PLC/SCADA exposures and ransomware impacts.
What Underwriters Want to See
Manufacturers with strong governance and documented controls typically access better terms. Underwriters focus on severity control: how you prevent defects, how you detect problems early, and how you manage contracts and quality traceability.
A clear risk presentation can materially improve outcomes — especially for exports, high-risk applications, or businesses with commissioning / installation exposures.
- Product range, end-use sectors and critical safety features (guards, interlocks, emergency stops)
- QA systems, inspection/testing regimes, traceability and non-conformance handling
- Design responsibility split: your scope vs customer/OEM scope, and any performance guarantees
- Contract terms: limitation of liability, warranties, indemnities and governing law
- Installation/commissioning controls, RAMS, hot works governance and competent persons
- Property protections: housekeeping, hot works permits, fire alarms, sprinklers and security
We supply engineered equipment into demanding environments and needed clarity on product liability, design risk and commissioning exposure. Insure24 helped us structure the right mix of cover and present our controls to underwriters.
Managing Director, UK Industrial Equipment ManufacturerPROTECT YOUR BUSINESS
- Manufacturing insurance programmes aligned to your products, contracts and export profile
- Support presenting QA/testing, commissioning controls and design responsibility to insurers
- Advice on product liability, public liability and professional indemnity interplay
- Guidance on cargo/transit, tools, projects and specialist extensions
- Clear documentation to support OEM tenders and customer audits
Compliance & Governance Considerations
Industrial equipment manufacturing insurance often needs to align with practical expectations such as:
- Documented QA, traceability and corrective action procedures
- Health & safety governance (RAMS, permits, hot works controls, contractor management)
- Design control and engineering sign-off (change control, approvals, calculations)
- Contract review discipline: warranties, indemnities and limitation of liability
- Cyber/OT hygiene where equipment is connected or remotely supported
FREQUENTLY ASKED QUESTIONS
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What insurance does an industrial equipment manufacturer typically need?
Most manufacturers consider property and business interruption, employers’ liability, public liability and product liability. If you design or specify equipment, professional indemnity is often important. Many businesses also add goods-in-transit/cargo, cyber/OT and specialist extensions for commissioning or projects, subject to underwriting.
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Does product liability cover defective equipment that just needs replacing?
Often not. Many product liability policies are designed for third-party injury or property damage caused by your product, not the cost of repairing or replacing the defective item itself where there’s no resultant damage. Wording and claim circumstances matter, so it’s important to understand the practical scope.
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Do I need professional indemnity if we manufacture equipment?
If you have design responsibility, provide engineering advice, sign off specifications, or give performance guarantees, professional indemnity can be highly relevant. It can help with claims alleging design/specification errors (subject to policy terms), which are not always addressed by product liability alone.
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Are installation and commissioning risks covered automatically?
Not always. Installation/commissioning exposures can fall across public liability, product liability, contract works and specialist extensions depending on what you do and where you do it. Insurers may require details of RAMS, competence, hot works controls and project values to offer suitable terms.
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Does manufacturing insurance cover contractual penalties and liquidated damages?
Usually not. Contractual penalties, liquidated damages and many forms of pure financial loss are commonly excluded. This is why contract review (limitation of liability, warranties, indemnities and force majeure) is a crucial part of risk management alongside insurance.
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What information helps insurers quote industrial equipment manufacturing risks?
Insurers typically look for product details and end-use, turnover and export territories, testing/QA processes, claims history, contract scope (including design responsibility), and site protections such as housekeeping, fire precautions and security. For commissioning work, RAMS and contractor controls are often required.