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Liability Insurance for Fabricators: What Each Policy Actually Does
Public Liability vs Products Liability vs Professional Indemnity
Metal fabrication businesses are often asked to provide “liability insurance” - but customers, principal contractors and OEMs may mean different things depending on the contract, the worksite, and whether you provide any design or technical input. Understanding the difference between Public Liability, Products Liability and Professional Indemnity (PI) is essential, because these policies respond to different types of claims.
Put simply:
Public Liability is about accidental injury or property damage caused by your activities (often on site or at your premises). Products Liability is about injury or property damage caused by a product/part you supplied (after it has left your control). Professional Indemnity is about financial loss arising from errors in advice, design, specification, or professional services.
Many fabrication businesses need a combination. Insure24 helps you choose the right structure so you meet contract requirements and avoid gaps.
THREE POLICIES. THREE DIFFERENT CLAIM TYPES.
The right combination depends on whether you only manufacture, whether you install, whether you supply into safety-critical systems, and whether you provide any advice, drawings, tolerances, calculations or QA sign-off.
At-a-Glance Comparison
Here’s a practical way to think about each cover. (Final wording varies by insurer and policy form, so always check the schedule and wording for your exact cover.)
| Cover Type | What it protects against | Typical fabrication claim examples | Common triggers |
|---|---|---|---|
| Public Liability | Third-party injury or property damage caused by your operations | Visitor slips in the workshop; forklift damages a client vehicle; on-site work damages customer property | Accidents during work, at your premises, or during installation/erection |
| Products Liability | Third-party injury or property damage caused by products/parts you supplied | Fabricated bracket fails and causes damage; welded assembly fails and injures someone; incorrect material grade leads to component failure causing property damage | Post-supply incidents where a supplied product is alleged defective |
| Professional Indemnity | Financial loss from negligent advice, design, specification or professional services | Incorrect tolerance advice causes batch rejection; design-for-manufacture change leads to failure; wrong drawing revision used; QA sign-off alleged to be negligent | Alleged professional error leading to financial loss (not necessarily injury/damage) |
The biggest misunderstanding: Products liability is not the same as professional indemnity. Products liability is usually about injury or property damage caused by a defective product. PI is usually about financial loss from professional errors (often including rework, rectification, and downstream costs), subject to the policy wording.
Public Liability (PL) for Fabrication Businesses
Public liability covers your legal liability for accidental injury to third parties or accidental damage to third-party property arising out of your business activities. For fabricators, public liability is often required if you have site visits, deliveries, or on-site work - or if customers and contractors enter your premises.
Typical PL Exposures
- Visitors to workshop/yard (slips, trips, impact injuries)
- Deliveries and collections (forklift movements, reversing risks)
- On-site installation/erection and “supply and fix” contracts
- Accidental damage to client premises during work
- Hot works on-site creating third-party property damage exposures
PL is usually expressed as a limit of indemnity (e.g., £2m, £5m, £10m). Required limits often depend on the customer, contract type, and the environment you work in.
Common PL Pitfalls
- Not disclosing on-site erection/installation work
- Assuming PL covers design/specification disputes
- Contractual liability clauses not aligned with policy wording
- Inadequate limits for principal contractor requirements
If you work on construction sites or in high-risk environments, your policy must accurately reflect the work scope - especially hot works, height work, lifting operations, or the use of hired plant.
Products Liability (Including “Your Work” After Supply)
Products liability covers claims where a product or part you supplied is alleged to be defective and causes third-party injury or third-party property damage. In metal fabrication, this can include welded assemblies, brackets, frames, structural elements, guards, enclosures, machine components, and bespoke fabricated parts supplied into larger systems.
Typical Products Liability Exposures
- Defective weld or fabrication defect causing failure in service
- Incorrect material specification or grade (as supplied)
- Incorrect finishing/coating leading to corrosion and failure
- Poor traceability/QA leading to undetected non-conformities
- Parts used in safety-critical equipment or guarding
Products claims can become complex quickly if parts are integrated into another product, distributed widely, or used in environments where failure causes significant property damage.
Common Products Liability Pitfalls
- Assuming “we just follow drawings” removes products risk
- Not declaring exports or overseas use (jurisdiction matters)
- Not disclosing safety-critical sectors or applications
- Confusing product recall / rectification costs with injury/damage claims
Some losses are not classic products liability: for example, rework and rectification costs may fall outside PL/products cover if there’s no third-party injury or property damage. This is where PI (and/or specific extensions) becomes relevant.
Professional Indemnity (PI): When Fabricators Need It
Many fabricators assume PI is only for consultants or designers. In reality, fabrication businesses can face PI exposures whenever they provide professional services - including advice, drawings, tolerances, design-for-manufacture input, or QA sign-off.
PI is primarily about financial loss, not necessarily injury/property damage. That means PI can be relevant for: rejected batches, rework, rectification, production delays, and downstream costs caused by alleged professional errors - subject to the policy wording.
Common PI Triggers in Fabrication
- Design changes suggested to improve manufacturability
- Tolerance advice and fit/function decisions
- Incorrect drawing revision or documentation control failures
- Material/spec advice that later proves unsuitable
- QA sign-off relied upon by customers/OEMs
If your quotes, emails, drawings, or technical discussions influence the final design or specification, PI should be considered - especially in OEM supply chains.
Common PI Pitfalls
- Not realising that “advice in emails” can create PI exposure
- Assuming products liability covers pure financial loss
- Not aligning PI retroactive date with trading history
- Letting PI lapse when contracts require it (claims-made cover)
PI is usually written on a claims-made basis, meaning it must be in force when the claim is made (and usually when circumstances are notified). Managing continuity is critical.
So… Which Covers Do You Actually Need?
A quick, practical rule-of-thumb for fabrication businesses:
If you have visitors, deliveries, or on-site work…
Public Liability is usually essential.
- Work on customer sites / erection / installation
- Forklift movements and deliveries at your premises
- General third-party exposure
If you supply parts, assemblies or fabricated products…
Products Liability is normally required.
- Parts used in machinery, structures or safety systems
- Components integrated into other products
- Downstream property damage exposure
If you advise, design, sign off, or provide technical input…
Professional Indemnity should be considered.
- Tolerance/spec decisions and design-for-manufacture changes
- Drawings, CAD revisions, QA documentation and sign-off
- Contracts requiring PI (OEM or framework agreements)
Most established fabricators choose a package
Many businesses use a combined policy for PL/products/EL plus separate PI (or an integrated PI section where available), depending on the insurer and risk. We’ll guide you through the cleanest structure for your situation.
- Reduce gaps between sections
- Align limits with customer requirements
- Ensure your declared activities match your contracts
“We had public and products liability, but the real issue was a tolerance decision that led to rejected batches. Insure24 helped us add PI so we weren’t exposed to pure financial loss claims.”
Operations Director, UK Contract Fabrication BusinessFREQUENTLY ASKED QUESTIONS
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Does public liability include product liability?
Often, products liability is included as part of a combined public/products liability policy-but not always. You should check your schedule and wording to confirm the products section is included, the limit of indemnity, and whether it applies to your goods, materials and supply territories.
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Is products liability enough if we also provide advice or drawings?
Not necessarily. Products liability is typically focused on third-party injury or property damage caused by defective products. If a customer alleges financial loss from advice, design changes, tolerance decisions or documentation errors, professional indemnity may be required.
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Can we be liable if we only manufacture to customer drawings?
Yes. Even where you follow drawings, claims can allege manufacturing defects, incorrect materials, faulty welding, incorrect finishing, or failure to warn about limitations. Products liability is designed for injury/property damage allegations after supply.
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What does professional indemnity cover in fabrication?
Professional indemnity can cover claims alleging negligent advice, design, specification, or professional services leading to financial loss. In fabrication, this can include tolerance decisions, drawing/document control issues, design-for-manufacture input, and QA sign-off-subject to the policy wording and exclusions.
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Does liability insurance cover rework, rectification and rejected batches?
Often, public/products liability focuses on third-party injury or property damage and may not cover the cost of redoing your own work. Some PI policies (and certain extensions) may respond to financial loss allegations, but terms vary. The right structure depends on your contracts and typical failure scenarios.
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How do we choose the right liability limits?
Limits are usually driven by customer and contract requirements, the environments your products are used in, and the potential severity of downstream loss. £5m public/products liability is common, but some contracts require £10m or higher. PI limits depend on contract values, downstream exposure and the nature of your design responsibilities.
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What information do you need to advise on the correct cover?
We’ll usually ask about your activities, whether you install or erect, what products/parts you supply, customer sectors, any design or advisory input, contract clauses, exports, QA controls and claims history. If you can share the insurance requirements from customers/OEMs, we can align the policy structure and limits.