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FACTORY, BUILDINGS & PROPERTY INSURANCE
Why Industrial Equipment Manufacturers Need Strong Property Cover
A factory loss can be existential for an industrial equipment manufacturer. Your premises typically hold a combination of high-value machinery, specialist tools, work-in-progress, materials, stock and documentation that enables production. Fire, flood, theft or major damage can stop output overnight — and for many manufacturers the bigger cost is not the physical damage, but the time to rebuild capacity and fulfil contractual deadlines.
Property insurance is the foundation that protects your buildings, contents and stock. But the right wording matters: manufacturing sites often have complex risk features such as hot works, welding/cutting, paint processes, solvents, hydraulic oils, battery charging, high electrical loads, dust/fume, and outsourced processes. Insurers also look closely at housekeeping, compartmentation, suppression, maintenance and security.
Insure24 helps equipment manufacturers present the risk clearly and position the right protections (alarms, sprinklers, hot works permits, storage controls, flood resilience and continuity planning) so you can access realistic terms (subject to underwriting) and reduce the chance of nasty surprises at claim time.
Common Property Claim Triggers in Manufacturing Sites
Underwriters focus on “severity events” — the types of incidents that cause large losses, long downtime and difficult reinstatement. The better you can evidence controls, the more confident insurers become in offering capacity and competitive rates.
Typical triggers include fire (especially from electrical faults and hot works), escape of water, storm/flood, theft, arson, and secondary damage arising from machinery breakdown or process failures.
- Fire & Smoke Damage – Electrical faults, hot works, poor housekeeping, flammable storage, paint/solvent risks.
- Escape of Water – Burst pipes, sprinkler discharge, roof leaks and internal flooding.
- Flood & Storm – Surface water, river flooding, roof uplift and wind-driven rain.
- Theft / Attempted Theft – Tools, copper, high-value equipment, stock and portable plant.
- Machinery-Related Loss Events – Overheating, lubricant escape, electrical arcing causing fire/secondary damage.
- Arson / Malicious Damage – Often linked to perimeter security and site access control.
What Factory & Property Insurance Can Cover
Property programmes for manufacturers are typically built from core cover plus carefully selected extensions. The right structure depends on your site, processes, contract dependencies and how quickly you could restore production.
We help you compare insurer wordings so you can see what is covered, what is excluded, and which conditions must be met for cover to respond.
- Buildings – Owned premises or landlord responsibility (as applicable), including outbuildings and fixed plant.
- Tenant Improvements – Fit-out, racking, partitions and fixtures you are responsible for.
- Contents – Equipment, office contents, IT, furniture and general business contents.
- Stock & Materials – Raw materials, components, finished goods and work-in-progress (WIP) (wording dependent).
- Tools, Jigs & Fixtures – Specialist tooling that can be business-critical to output.
- Business Interruption – Loss of gross profit and increased cost of working after insured damage.
Business Interruption: The Part Many Manufacturers Underestimate
If your factory stops, your revenue doesn’t pause in a neat way. You may still have payroll, leases, finance, rent, and ongoing overheads — while customers push for delivery dates, penalties and replacement suppliers.
A strong BI section can be the difference between “we survived” and “we never recovered”. The key is selecting the right indemnity period and building realistic numbers that reflect reinstatement time, long-lead machinery, planning approvals, and supply chain dependencies.
- Indemnity Period – Often 12/18/24+ months depending on reinstatement reality.
- Increased Cost of Working – Overtime, outsourcing, temporary premises, hire equipment.
- Dependencies – Key suppliers, utilities and single points of failure.
- Contract Pressure – Managing customer expectations and avoiding uninsured LDs.
- Claims Evidence – Documentation and accounting support to evidence loss.
- Resilience Planning – Practical continuity measures can support underwriting.
What Underwriters Want to See for Factory & Property Risks
Property underwriters price for severity. They want confidence that you prevent incidents, detect problems early, and limit spread if something happens. The quality of your controls and documentation can materially affect outcomes.
Strong submissions also explain what you do on-site: processes, heat sources, combustibles, storage arrangements and your approach to contractor management.
- Construction, occupancy and any third-party/shared areas
- Fire protections: alarms, extinguishers, hydrants, suppression/sprinklers (where applicable)
- Hot works controls: permits, supervision, fire watch, contractor competency
- Housekeeping and waste management (including dust/combustibles control)
- Security: perimeter, access control, CCTV, intruder alarm, keyholder response
- Flood exposure and resilience: drains, bunding, storage height, recovery planning
After a small electrical fire we realised our sums insured and downtime exposure didn’t reflect reality. Insure24 helped us restructure property and BI so the business could recover properly if the worst happens.
Operations Director, UK Equipment ManufacturerPROTECT YOUR BUSINESS
- Factory and property cover aligned to your real site exposures and processes
- Support presenting fire, hot works, housekeeping and security controls to underwriters
- Guidance on sums insured, reinstatement basis and avoiding underinsurance
- Business interruption support: indemnity periods, dependencies and recovery planning
- Clear documentation to support lender, landlord and customer requirements
Compliance & Governance Considerations
Factory and property insurance for manufacturers commonly needs to align with practical expectations such as:
- Documented hot works permits and contractor management controls
- Fire risk assessment actions, alarm testing, extinguisher servicing and maintenance
- Housekeeping standards and combustible storage separation
- Security protocols and keyholder response arrangements
- Business continuity planning and critical equipment maintenance schedules
FREQUENTLY ASKED QUESTIONS
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What does factory and property insurance typically cover for manufacturers?
Factory and property insurance commonly covers buildings (owned or tenant improvements, as applicable), contents, stock/materials and business-critical assets such as tools, jigs and fixtures, subject to terms, limits and exclusions. Optional extensions can include theft, accidental damage, and certain types of water or storm damage depending on the wording.
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Is business interruption included automatically?
Business interruption is often arranged alongside property cover but is not always automatic. It is typically triggered by insured physical damage at your premises and can cover loss of gross profit and increased cost of working during reinstatement, subject to the selected indemnity period and policy terms.
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How do we avoid underinsurance on buildings and stock?
Keep sums insured up to date and reflect reinstatement costs, not historic purchase price. For buildings, professional reinstatement valuations can help. For stock, review seasonal peaks and work-in-progress values. Underinsurance can reduce claim payments, so accurate values are essential.
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What are insurers most concerned about on manufacturing premises?
Insurers focus on major loss drivers such as fire (including hot works and electrical faults), housekeeping, combustible storage, security, flood exposure, and maintenance of critical equipment. They also look at how you manage contractors, permits, and separation of high-risk processes.
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What information do insurers need to quote factory property risks?
Insurers usually need construction and occupancy details, activities on-site, sums insured for buildings/contents/stock, fire and security protections, claims history, and any hot works or flammable processes. For BI they also look at turnover/gross profit figures, dependencies and the chosen indemnity period.
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Does property insurance cover machinery breakdown?
Not always. Standard property policies typically cover damage from insured perils (such as fire, flood or storm) but may not cover internal mechanical/electrical breakdown unless you add machinery breakdown / engineering inspection cover. The right answer depends on your policy wording and the cause of loss.