My Account
We compare quotes from leading insurers
Business Interruption Insurance for Metal Fabrication & Manufacturing
Why Business Interruption Cover Matters in Fabrication
Metal fabrication businesses rely on a steady production rhythm: cutting, folding, machining, welding, finishing, assembly, packing and dispatch. When that rhythm is interrupted, the financial impact isn’t limited to the physical damage that caused the problem. The bigger risk is often the lost turnover, the ongoing wages, the rent and finance payments, and the cost of keeping customers satisfied while production is down.
Business Interruption (BI) - sometimes called Loss of Income or Loss of Gross Profit insurance - is designed to protect your profits and cashflow after an insured event (such as a fire or flood) stops or reduces your ability to trade. For metal fabrication and manufacturing, BI can be the difference between a temporary disruption and a long-term viability problem.
Insure24 arranges business interruption cover for a wide range of fabrication operations, from structural steel and heavy fabrication through to precision sheet metal, CNC machining, contract manufacturing and multi-process engineering workshops.
BUSINESS INTERRUPTION COVER THAT KEEPS YOU MOVING
BI cover is usually arranged alongside your property insurance (buildings, contents, stock) and can be extended to reflect the realities of fabrication: long lead times for machinery, specialist repairs, outsourced production, and strict contractual delivery requirements.
What Does Business Interruption & Loss of Income Insurance Cover?
Business interruption insurance is designed to put your business back into the financial position it would have been in if the disruption had not occurred - within the limits and terms of your policy. For fabrication and manufacturing businesses, the key is ensuring the policy reflects how you actually operate: your production pipeline, lead times, dependence on specialist equipment, and customer contract deadlines.
- Loss of Gross Profit – protects your lost profit contribution when turnover drops after an insured event.
- Increased Cost of Working – helps pay extra expenses to keep trading (e.g., outsourcing cutting/welding, hiring temporary space, overtime, specialist logistics).
- Wages / Payroll Protection – helps retain key staff during downtime, subject to how the policy is arranged.
- Standing Charges – supports ongoing fixed costs like rent, business rates, utilities, finance/lease payments, and key contracts.
- Additional Accountants’ Charges – can help cover professional fees needed to prepare the claim.
- Denial of Access – protection where you can’t access premises due to an insured event nearby (wording dependent).
- Book Debts – cover for loss of accounting records or inability to recover debts after a loss event.
- Customer/Supplier Extensions – options to extend cover for disruption at key suppliers or customers (wording dependent).
Common Causes of Downtime in Metal Fabrication
BI insurance responds when your interruption follows an insured peril under your property section (and/or agreed extensions). Fabrication businesses face a mix of traditional property risks and highly practical “production stopping points” linked to specialist plant and processes.
Fire & Hot Works Losses
Cutting and welding introduce ignition sources; extraction systems, electrical load, and flammables add to severity. A single fire can take out machines, jigs, stock, and the production layout you rely on. BI covers the knock-on impact: lost orders, re-planning, outsourcing, and the time needed to rebuild safely.
- Welding/cutting sparks and hot works
- Electrical faults in high-load machinery
- Smoke damage to CNC/controls and finished goods
Flood, Storm & Water Damage
Water and machinery don’t mix. Flooding can destroy electrics, motors, drives, tooling, and stored materials. Even where the building can be dried quickly, the long lead time for specialist repairs can create a prolonged interruption.
- Flooded electrics, drives, and control cabinets
- Corrosion or contamination of stock and WIP
- Loss of calibration and quality consistency
Machinery Breakdown & Critical Equipment Failure
A press brake failure, laser source issue, spindle damage, compressor breakdown, or extraction outage can stop production immediately. BI can be extended to align with machinery breakdown cover, protecting income while repairs take place.
- Laser/plasma cutting downtime
- CNC spindle, servo, or control failure
- Compressed air and extraction outages
Theft, Vandalism & Malicious Damage
Fabrication premises can be targeted for tools, copper, metals, and portable plant. Even if the direct property loss seems manageable, the interruption can last longer if specialist tools or components are stolen and replacements are delayed.
- Theft of tools, welding sets, and measuring equipment
- Damage to doors, shutters, and security systems
- Disruption to dispatch and receiving
Choosing the Right Indemnity Period & BI Sum Insured
Two of the most important BI decisions are how long you might be disrupted and how much financial protection you need. Under-insuring BI is a common issue in manufacturing - especially where key machinery has long lead times, or reinstatement requires specialist contractors and re-commissioning.
Indemnity Period (How Long Cover Lasts)
The indemnity period is the maximum period the insurer will pay BI losses after an insured event. In fabrication, a “reasonable” period depends on:
- Time to repair or replace CNC/laser/press brake equipment
- Availability of specialist engineers and spare parts
- Rebuild/reconfiguration of production layout and utilities
- Re-commissioning, calibration and QA sign-off
- Customer re-approval of processes and parts
Many businesses choose 12 months; some require 18–24 months for complex sites or critical, high-value machinery. Choosing too short an indemnity period can leave you exposed if recovery takes longer than expected.
BI Sum Insured (How Much Cover You Buy)
BI is often based on gross profit (turnover minus variable costs) or a similar measure. For fabrication businesses, variable costs may include raw materials, bought-in components, subcontracted processes and certain transport costs - but the correct basis depends on how your accounts are structured.
Getting the sum insured right is about protecting the margin you need to pay fixed costs and maintain profitability while operations are disrupted. We can help you align the policy basis with your management accounts so the cover reflects your real-world cashflow.
- Turnover profile and seasonality
- Contract concentration (dependence on a few customers)
- Fixed overheads and key payroll costs
- Realistic recovery plan and outsourcing options
Extra Costs of Working: Keeping Production Going
One of the most valuable features of BI cover for metal fabrication is the ability to fund practical continuity measures. If you can keep customers supplied - even partially - you protect your future revenue, reduce contractual friction, and maintain your reputation.
Examples of Increased Cost of Working
- Outsourcing cutting, folding, machining, or welding to a partner shop
- Temporary premises or additional workshop space
- Hire of plant, compressors, generators or extraction equipment
- Overtime and additional shifts to recover lost production
- Premium freight and expedited logistics to meet deadlines
- Temporary office/IT arrangements and admin support
These costs must usually be “economic” - meaning they reduce the overall loss - and they must fit within policy terms. We’ll help you structure cover to match how you would realistically respond to a disruption.
Supply Chain & Dependency Exposures
Some fabrication businesses depend heavily on a single supplier (specialist material grades, certified fasteners, outsourced finishing) or a single customer contract (OEM call-offs or major projects). Where appropriate, extensions can be considered for:
- Disruption at key suppliers (e.g., finishing, heat treatment)
- Loss events at a key customer site impacting your orders
- Utilities interruption and denial of access (wording dependent)
- Loss of key records affecting dispatch and invoicing
We’ll explain what is and isn’t insurable, and how to present your dependencies to underwriters in a way that supports fair pricing and realistic terms.
“When our workshop had a serious fire, the property claim was only half the battle. Business interruption cover helped protect our cashflow while we outsourced work, replaced key equipment, and rebuilt production.”
Director, UK Metal Fabrication BusinessHow to Get Business Interruption Insurance
BI cover needs to be set up correctly at the start. The right indemnity period, sums insured, and extensions can materially change how well your policy responds after a serious incident. We keep the process straightforward while ensuring the insurer gets the details needed to quote accurately.
- 1. Understand your production model – key machines, bottlenecks, lead times, and outsourcing options.
- 2. Set the indemnity period – 12, 18 or 24 months based on realistic reinstatement timelines.
- 3. Confirm the BI basis – gross profit / revenue basis aligned with your accounts.
- 4. Build the package – property, breakdown, BI, and relevant extensions in one joined-up policy.
FREQUENTLY ASKED QUESTIONS
+-
What is business interruption (loss of income) insurance?
Business interruption insurance helps protect your profits and cashflow when an insured event (such as fire, flood, or other covered property damage) interrupts your ability to trade. It can cover loss of gross profit and certain additional costs to keep the business operating during recovery.
+-
Is business interruption included with property insurance?
BI is commonly arranged alongside property insurance, but it’s not always automatically included. You typically select BI as a section of cover and set the indemnity period and sums insured. For fabrication businesses, it’s important the BI cover is structured around realistic reinstatement and machinery lead times.
+-
What is an indemnity period and how long should it be?
The indemnity period is the maximum time your BI claim can run after an insured event. Many businesses choose 12 months, but fabrication sites with critical machinery, specialist commissioning, or complex reinstatement may require 18–24 months. Choosing too short a period can leave you exposed if recovery takes longer than planned.
+-
Does BI cover machinery breakdown downtime?
Standard BI typically follows insured perils under your property section. However, BI can often be arranged to work alongside machinery breakdown cover, depending on the insurer and policy structure. This is particularly relevant for CNC, laser/plasma, press brakes, compressors and critical equipment.
+-
What are “increased costs of working”?
Increased cost of working can help pay extra expenses incurred to reduce the impact of a disruption-such as outsourcing work, renting temporary space, hiring equipment, overtime, or premium freight. These costs must usually be reasonable and linked to reducing the overall insured loss, subject to policy terms.
+-
How is BI (loss of income) calculated?
BI is usually based on “gross profit” (turnover less variable costs) or a similar agreed basis, plus insured additional costs. The calculation depends on your accounts and policy wording. We can help you set the correct basis so the insured figures reflect your actual financial exposure.
+-
Does BI cover loss of customers after an incident?
BI is designed to cover loss during the indemnity period while you recover. It can include expenses to keep trading, which may help retain customers. Long-term reputational impact is more complex and depends on your ability to resume operations and meet contractual requirements. The best approach is a policy built around realistic recovery and continuity planning.
+-
What do you need to quote business interruption insurance?
We typically need turnover, gross profit or financial summaries, details of your premises and key machinery, your biggest production bottlenecks, your typical recovery plan (outsourcing options), and the indemnity period you want. If you have finance agreements or key customer contracts, those details can also help structure cover correctly.