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INSURANCE FOR HIGH-SEVERITY PRODUCTS & HIGH-VALUE PLANT
Why Material Handling Manufacturers Need Specialist Cover
Material handling equipment sits at the intersection of engineering, safety-critical performance and contractual liability. A conveyor, hoist, crane, lifting attachment, pallet racking system or AGV failure can cause severe injury, major property damage, production shutdowns and complex legal disputes.
At the same time, your own factory often contains high-value machinery (CNC, welding bays, paint lines, laser cutters, test rigs, presses), specialist stock (steel sections, hydraulics, motors, gearboxes, controls) and reliance on key suppliers. Insurance needs to protect: your premises and cashflow, your people, and your products once they’re in the real world.
Insure24 arranges cover for UK manufacturers of conveyors and conveyor modules, cranes/gantries, hoists, lifting beams, spreader frames, vacuum lifters, fork attachments, pallet trucks, racking, mezzanines, dock levellers, automated handling systems, robotics integration, and related control systems and software.
1) Factory, Buildings & Business Interruption (BI)
For most manufacturers, property damage and BI are the financial foundation. If a fire, flood, explosion, major machinery incident, or utility failure stops production, the biggest loss is often not the damaged equipment — it’s the lost output and delayed deliveries. A well-built programme ties together buildings, contents, plant and stock with BI that reflects how long it truly takes to recover.
What we typically protect
- Buildings – owned or leased premises, including landlords’ fixtures where required.
- Contents – tooling, jigs, fixtures, benches, racking, IT and office equipment.
- Plant & machinery – CNC, welding/robot cells, presses, cutting lines, paint/finishing and test rigs.
- Stock & materials – steel sections, hydraulic components, motors, gearboxes, controls, cables and consumables.
- Goods in production – work-in-progress and part-built systems (often overlooked at renewal).
Practical tip: manufacturers often have “value spikes” (project builds, large frames, bulk motor deliveries, peak seasonal orders). We’ll help you reflect this in declared values so you don’t accidentally insure for “average week” when you need cover for “worst week”.
BI that matches your recovery reality
- Correct trigger – BI is usually linked to insured property damage; extensions may be needed for other shutdown causes.
- Indemnity period – specialist plant lead times can exceed 12 months (including install, commissioning and retesting).
- Gross profit / revenue basis – structured so the claim reflects your actual financial model.
- Increased Cost of Working (ICOW) – budgets to outsource, expedite shipping, hire temporary plant or add extra shifts.
- Dependencies – key suppliers, outsourced coating, specialist machining, controls suppliers, logistics and utilities.
Practical tip: if a single supplier (motors, drives, PLCs, hydraulics) can halt build schedules, we’ll identify that dependency early so insurers can price it properly — and you avoid disputes later.
2) Engineering Insurance & Machinery Breakdown
Material handling manufacturers are equipment businesses — which means you rely on equipment to make equipment. A common gap is assuming your property policy automatically covers internal breakdown. In reality, many property wordings respond to “insured perils” (like fire) but not sudden mechanical or electrical failure.
Engineering cover can protect against breakdown of insured plant, plus optional extensions for deterioration of stock, hired-in plant, and “machinery BI” where a breakdown event stops production.
Where breakdown losses hit hardest
- Single points of failure – one CNC, one press, one laser cutter, one paint line, one test rig.
- Control system failures – drives, panels, PLC/HMI, sensors and cabling that are complex to diagnose.
- Compressor/air issues – compressed air failures can stop tooling and automation.
- Hydraulics – leaks, pump failures and contamination can destroy components and cause extended downtime.
- Electrical supply / switchgear – failures can be catastrophic and expensive to reinstate safely.
Practical tip: insurers often want a basic plant schedule and an understanding of planned maintenance. Better information usually means fewer restrictions and a smoother claims path.
Underwriter-ready information (that speeds up quotes)
- Plant list (values, age, make/model if available) and which items are production-critical.
- Maintenance approach (in-house/contractor), breakdown history, and improvements made after incidents.
- Electrical inspection overview (what’s done, by who, how often) for higher-load environments.
- Spare parts strategy (especially for drives, motors, hydraulics and specialist controls).
- Fire and housekeeping controls around welding, cutting, paint/finishing and storage.
If you’re not sure what to provide, call us — we’ll guide you through the “minimum viable” submission that still presents well.
3) Employers’ Liability (EL) & Workplace Injury Risk
Manufacturing environments combine manual handling, lifting operations, welding and fabrication, machinery, forklift movements, high racks, and contractors. Employers’ Liability is legally required in most cases — but your insurance outcome is heavily influenced by how risks are managed and evidenced.
Typical EL claim drivers in this sector
- Manual handling – frames, rollers, motors, beams, pallets and repetitive assembly tasks.
- Machinery guarding – entanglement, pinch points, cutting operations and rotating equipment.
- Welding / hot works – burns, eye injuries, fume exposure and fire incidents.
- Working at height – mezzanines, racking builds, overhead cranes, installs and testing.
- Forklift movements – site traffic management, pedestrian separation and near misses.
Practical tip: insurers respond well to a simple narrative of controls: inductions, permits, segregation, training, PPE, inspections, and contractor management. It doesn’t need to be fancy — it needs to be credible.
Where manufacturers get caught out
- Labour-only contractors – can be treated as employees depending on supervision/control.
- Multi-site work – installation and service exposures may need declaring (including work at customers’ premises).
- Subcontracted hot works – contractor controls and permits matter at claim time.
- Overtime / peak production – increased incident frequency if fatigue and supervision are stretched.
- Long-tail conditions – respiratory issues and repetitive strain can become complex claims over time.
We’ll help you present workforce, payroll split, activities, and site controls so the EL section is rated fairly and remains sustainable.
4) Public & Products Liability: Your Equipment in the Real World
When your equipment is installed in a warehouse, factory, port, distribution hub or food facility, the exposure can scale quickly. A failure might damage stock, cause a production stoppage, or injure a third party. Products Liability protects you where your product causes third-party injury or third-party property damage — including legal defence.
Material handling equipment often involves high forces, moving parts, overhead loads, guarding requirements, safe load limits and operator training. The difference between “near miss” and “major claim” can be one bracket failure, one weld defect, one control logic error, or one installation variation from the approved design.
Common exposure points we see
- Weld quality / fatigue – cyclic loading, vibration and repetitive lift cycles.
- Fasteners / assemblies – missing torque, incorrect grade, poor thread engagement.
- Hydraulic failure – hose rupture, seal failure, pressure spikes and uncontrolled movement.
- Controls & safety circuits – interlocks, e-stops, sensor faults, software logic and updates.
- Installation variance – anchor points, floor levels, clearances, guarding and handover training.
Practical tip: if you do installation, servicing or site work, we’ll ensure your liability wording reflects those activities — not just “manufacture”.
What liability usually does (and doesn’t) cover
- Typically covered – third-party injury and third-party property damage caused by your products/work.
- Often excluded – the cost to repair/replace your own defective product (“your work” / rectification).
- Often excluded – pure financial loss without physical damage (unless specifically negotiated).
- Often excluded – contractual penalties / liquidated damages unless you buy specialist solutions.
- Separate cover – recall/withdrawal/rectification is usually a different policy section.
We’ll help you map your customer contracts to insurance, so you’re not unknowingly signing up to liabilities your policy can’t respond to.
5) Professional Indemnity (PI) for Design, Specification & Integration
Many material handling manufacturers do more than “build to print”. If you design systems, produce calculations, specify safe load limits, integrate automation, alter safety circuits, or advise on layouts and throughput, you may have a professional services exposure. PI (or “design liability”) can protect you where a design/spec error causes a third-party loss.
This matters more than ever as manufacturers move into automation: conveyors with integrated controls, robotics cells, AGVs/AMRs, warehouse management system interfaces, and safety-rated control architectures.
Where PI claims come from
- Incorrect calculations – load rating, duty cycle, fatigue and structural assumptions.
- Non-compliant design choices – guarding, safety functions, signage and documentation.
- Integration errors – control logic, interlocks, interfaces and commissioning decisions.
- Specification ambiguity – unclear scope, acceptance tests, tolerances and performance metrics.
- Change control – upgrades and modifications made without full risk review or documented sign-off.
Practical tip: if you issue drawings, calculations, method statements, operating manuals, commissioning documents or advice for a fee (or as part of supply), PI is worth discussing — even if you “don’t call it consultancy”.
How we structure PI sensibly
- Define your design role (full design vs partial vs build-to-spec) clearly to avoid mis-rating.
- Match territorial exposure (UK only vs EU/Worldwide) to where products are used.
- Align retroactive dates and “claims-made” features to your contract reality.
- Coordinate PI with Products Liability to reduce overlap gaps.
- Discuss contractual terms (caps, limitations, exclusions) alongside insurance.
The goal isn’t “buy everything” — it’s to make sure your biggest design-led loss pathways have a sensible solution.
“Material handling claims are rarely simple. The best outcomes happen when your cover, contracts and documentation line up — product liability, design responsibility, and installation scope all need to be presented clearly to underwriters.”
Insure24 Manufacturing Team6) Product Recall / Rectification, Testing & Certification Risk
A defect doesn’t always cause immediate injury — it may be discovered during audits, inspections, commissioning, or after near-miss incidents. Without specialist extensions, many policies won’t pay the cost to find, remove, replace or rectify your own products, even if you “do the right thing” and proactively address safety concerns.
If you manufacture safety-critical items (lifting attachments, overhead systems, safety-rated controls, pallet racking with strict load regimes), it’s worth exploring whether recall/rectification cover is appropriate, and how this interacts with warranties and contractual obligations.
What we’ll explore with you
- Recall / withdrawal triggers – what counts as a “recall event” vs a quality dispute.
- Rectification costs – on-site labour, travel, crane hire, access equipment and re-commissioning.
- Traceability – serialisation, batch control, component tracking and documentation.
- Testing regimes – proof load tests, NDT, functional safety checks, commissioning and sign-off.
- Supplier quality – motors, drives, hydraulics, steel and fabricated sub-assemblies.
Practical tip: insurers will always prefer robust traceability. If you can show “what went where”, you can often reduce the size and cost of remediation.
Quality systems that help underwriting
- Documented change control – design revisions, ECOs, and approvals.
- Welding controls – procedures, qualifications, inspection and records.
- Final inspection packs – torque, fit checks, safety function verification, sign-offs.
- Installation handover – manuals, training records, acceptance tests and limitations of use.
- Clear contract scope – what you control vs what the customer controls on-site.
If you have ISO-style documentation (or equivalent), great — but even a pragmatic “inspection pack” can materially improve insurer confidence.
7) Contractual Liability, Performance Guarantees & “Downstream Loss”
Material handling systems can be embedded in customers’ operations. If a conveyor line fails in a distribution centre, the customer’s loss may include overtime, missed despatch windows, spoiled stock, penalties and third-party claims. Many of these losses are contract-driven.
Insurance is not a substitute for contract discipline — but a good broker helps you identify where the contract expects cover that standard policies won’t provide, so you can renegotiate, limit liability, or explore specialist solutions.
Common contractual pressure points
- Fitness for purpose and broad performance warranties.
- Liquidated damages for delays and downtime penalties.
- Indemnities that go beyond negligence (including “hold harmless” language).
- Consequential loss clauses that customers try to push onto suppliers.
- Territory / jurisdiction expansions (EU/US terms) that change insurer appetite dramatically.
Practical tip: if you’re asked to accept uncapped downtime liability, bring it to us early. Often it can be reworded in a way that’s still commercially acceptable.
How Insure24 helps
- We translate your contracts into an insurer-friendly risk story (so underwriters understand what you’ve actually agreed).
- We align PI + Products Liability, so responsibility for design vs manufacture vs install is clear.
- We highlight non-insurable obligations, so you can manage them commercially and operationally.
- We help present quality/testing controls that reduce “severity fear” in underwriting.
- We structure limits to match realistic worst-case events (not just “last year’s limit”).
The outcome: fewer surprises at renewal, better clarity at claim time, and a programme that supports growth.
8) Cyber & Operational Technology (OT) Risk for Automated Handling
As material handling becomes automated, cyber risk becomes operational risk. A ransomware incident or malicious access to control systems can halt commissioning, stop a site, or compromise safety functions. Many traditional policies contain cyber exclusions that can create gaps if you assume “it’s covered somewhere”.
Relevant cyber/OT loss pathways
- Commissioning disruption – projects delayed due to locked systems or corrupted configurations.
- Supplier compromise – compromised updates, remote access tools or credential theft.
- Engineering workstation attack – loss of PLC code, drawings, BOMs, and manufacturing data.
- Operational shutdown – control systems offline, resulting in revenue loss and urgent remediation costs.
- Data breach – contracts, pricing, customer information and employee data exposure.
If you have remote access for diagnostics or service, or you hold sensitive customer specs, cyber is worth discussing as part of the overall programme.
What insurers usually look for
- Multi-factor authentication (MFA) for key systems and remote access.
- Backups (offline/immutable) and a basic recovery plan that’s been tested.
- Patch management approach for servers/workstations and key applications.
- Access control for OT environments (segmentation where practical).
- Supplier management for third-party software and remote support tools.
You don’t need perfection — you need a defensible baseline and an honest description of your environment.
How to Get a Quote (and what we’ll ask for)
The fastest route to strong terms is a clear, underwriter-ready summary. Don’t worry — we’ll help you package it. Here’s what usually makes the biggest difference for material handling equipment manufacturers.
Key business information
- Turnover (UK/export), staff count, payroll split and main activities (manufacture/design/install/service).
- Products list: conveyors, cranes/hoists, attachments, racking, automation, controls and typical use environments.
- Top customers and contract types (frameworks, projects, service agreements).
- Claims history and improvements implemented.
- Any overseas exposure (sales territories, installations, subsidiaries, distributors).
Operational / risk information
- Buildings/plant/stock values (including peak), plus any high-value single items of plant.
- Quality controls: inspection packs, testing, traceability, welding controls and sign-off process.
- Installation/service approach: contractor use, RAMS, permits, site controls and training/handover.
- Design responsibility: drawings/calculations issued, scope boundaries, change control.
- Cyber baseline: MFA, backups, remote access, and who manages IT/OT.
The goal is to show insurers you understand your exposures and run a controlled operation. That’s what earns better terms.
FREQUENTLY ASKED QUESTIONS
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What does material handling equipment manufacturing insurance typically include?
Most programmes combine property (buildings/contents/plant/stock), business interruption, employers’ liability, public and products
liability, and (where relevant) professional indemnity for design/specification. Many manufacturers also add engineering/machinery
breakdown, goods in transit, cyber, and specialist extensions depending on contracts and product risk.
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Do I need products liability if I only supply to businesses (not the public)?
Yes. Products liability is about third-party injury or third-party property damage caused by your product, regardless of whether the end user
is a business or a member of the public. Material handling equipment can cause high-severity incidents in warehouses and factories, so
product liability is usually a core requirement.
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Is the cost to replace my defective product covered?
Often not under standard liability cover. Liability policies are designed to cover injury or damage to others and associated legal defence,
but they commonly exclude the cost to repair/replace your own defective product (“rectification”). If you have significant exposure to
remedial work, recall, or widespread rectification, we can explore specialist extensions or separate cover options.
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When do material handling manufacturers need professional indemnity (design liability)?
If you design systems, issue drawings/calculations, specify safe load limits, advise on layouts/throughput, integrate automation or safety
functions, or provide engineering advice as part of supply, PI is worth considering. It can respond where a design/spec error causes a
third-party loss, especially when the claim is more about “wrong design” than “faulty manufacture”.
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Does property insurance cover machinery breakdown in my factory?
Not always. Many property wordings focus on insured perils (like fire, flood or storm) and may not cover sudden internal mechanical/electrical
failure. Engineering/machinery breakdown can fill that gap and can be paired with “machinery BI” if breakdown would halt production.
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What information do insurers need for a material handling equipment manufacturing quote?
Typically: turnover (UK/export), activities (manufacture/design/install/service), product list and where used, key contract terms, claims history,
buildings/plant/stock values, BI basis and indemnity period, workforce/payout split, quality/testing controls, and (where relevant) cyber baseline.
Insure24 can guide you through a simple submission that still presents well to underwriters.