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How Are Metal Fabrication Insurance Premiums Calculated?
Metal fabrication insurance costs are not fixed. Premiums are calculated by insurers based on how your business operates, the risks involved, and the potential severity of a claim. Welding, cutting, grinding, hot works, site activities and the value of property and equipment all influence the final price.
This guide explains the main pricing factors insurers use, typical cost ranges, and practical steps you can take to control premiums without leaving dangerous gaps in cover.
1. Business Activities & Risk Profile
The single biggest factor in pricing is what you actually do. Two businesses both described as “metal fabricators” can attract very different premiums depending on their activities.
- Extent of welding, cutting, grinding and hot works
- Workshop-only vs site-based or structural work
- Installation, erection or working at height
- Design, specification or advisory exposure
- Use of subcontractors (labour-only vs bona fide)
- Type of clients and premises worked on
Businesses carrying out higher-risk hot works on client sites or structural installations typically pay more than workshop-only fabricators with controlled processes.
2. Turnover, Payroll & Contract Values
Insurers use financial data as a proxy for exposure. Higher turnover generally means more work completed and more opportunities for something to go wrong.
- Annual turnover split by activity
- Largest single contract value
- Number of employees and wage roll
- Use of temporary or subcontract labour
- Growth trends year-on-year
Under-declaring turnover can invalidate cover, while over-declaring can inflate premiums. Accuracy matters.
3. Claims History & Loss Experience
Your past claims record is a strong indicator of future risk. Insurers usually review at least the last three to five years.
- Number of claims and claim frequency
- Type of claims (injury, fire, damage, theft)
- Claim values and severity
- Open vs settled claims
- Evidence of lessons learned and improvements
Even small repeated claims can increase premiums more than a single isolated incident.
4. Property, Machinery & Business Interruption Values
If your policy includes buildings, contents, machinery or business interruption, these sums insured directly affect cost.
- Workshop or factory reinstatement value
- Value of machinery, extraction and compressors
- Stock levels at peak trading periods
- Tools and portable equipment values
- Business interruption indemnity period
Underinsurance can reduce claims payments, but over-insurance increases premiums unnecessarily. Getting values right is critical.
5. Risk Management & Controls
Strong risk controls can significantly improve pricing and insurer appetite, especially for welding and hot works.
- Hot works permits and fire watch procedures
- Housekeeping and waste control
- Extraction / LEV systems and maintenance
- Training, competency and RAMS
- Security, alarms and CCTV
- Spill response and environmental controls
Insurers price risk, not just turnover. Good controls reduce both premiums and claim likelihood.
Typical Metal Fabrication Insurance Cost Ranges
Every business is different, but the ranges below give a rough indication of annual premiums (excluding IPT).
- Small workshop-only fabricator: from £500–£1,500
- Workshop + limited site work: £1,500–£4,000
- Structural / high hot works exposure: £4,000+
- Property & business interruption add-ons: variable
These figures are indicative only. Accurate pricing requires a full review of your operations.
How Insure24 Helps Control Your Insurance Costs
We don’t just look for the cheapest quote. We help present your fabrication business properly to insurers, identify unnecessary loadings, and structure cover that reflects your real risk profile.
- Specialist knowledge of fabrication and hot works risks
- Clear presentation to the right insurers
- Support improving risk controls
- Review of limits, excesses and policy wording
- Ongoing support at renewal and after claims
FREQUENTLY ASKED QUESTIONS
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What is the biggest driver of fabrication insurance cost?
The biggest drivers are the level of hot works exposure, site-based activities, claims history and the value of property and equipment insured.
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Can better risk controls reduce premiums?
Yes. Strong housekeeping, hot works procedures, extraction, training and security can significantly improve underwriting terms.
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Is cheap insurance always a warning sign?
Sometimes. Very low premiums can indicate exclusions, restricted hot works cover or inadequate limits.
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How often should I review my insurance costs?
At every renewal and whenever your activities, turnover or premises change.