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BREAKDOWN INSURANCE THAT KEEPS MANUFACTURING MOVING
Why Machinery & CNC Breakdown Cover Matters
In metal fabrication and precision manufacturing, the machines are the business. If a CNC mill, turning centre, laser cutter, press brake, compressor or critical control system fails, production can stop instantly - and the cost isn’t just the repair bill. Missed deadlines, rejected orders, emergency subcontracting and contractual penalties can quickly outweigh the cost of the part.
Machinery breakdown insurance is designed to protect against sudden and unforeseen mechanical or electrical failure - and, with the right extensions, to protect your income when breakdown stops you working. Insure24 helps you arrange the correct cover for CNC and fabrication equipment, aligned with your plant values and real-world downtime risk.
What Does Machinery, CNC & Equipment Breakdown Insurance Cover?
Machinery breakdown (sometimes referred to as engineering breakdown) is designed to cover the cost of repairing or replacing insured plant and equipment following sudden, accidental breakdown. The exact scope depends on the insurer, the type of equipment, how it is used, and the maintenance controls you have in place.
- CNC machines – machining centres, lathes, mills, multi-axis equipment
- Fabrication equipment – press brakes, guillotines, rollers, punches, saws
- Laser / plasma / waterjet – cutters and associated control units
- Welding & finishing equipment – welders, extraction units, blasting equipment (where insurable)
- Compressors & air systems – critical for tool operation and pneumatic systems
- Electrical and electronic failure – drives, motors, transformers, control panels
- Sudden mechanical failure – gears, bearings, spindles, ball screws and critical moving parts
- Operator damage (accidental) – subject to policy terms and exclusions
- Control system issues – PLC/servo faults, CNC controller problems (subject to policy)
- Power disturbance losses – voltage spikes, surges and certain electrical events (if included)
- Business interruption – loss of gross profit when breakdown stops production (optional/linked cover)
- Increased cost of working – overtime, temporary equipment hire, outsourcing to meet deadlines (optional)
- Deterioration of stock – where breakdown impacts temperature controlled processes (sector dependent)
- Expediting expenses – express delivery for parts and urgent engineer call-outs (optional)
- Loss minimisation support – practical claims handling and engineering involvement
- Tailored sums insured – set per machine, per schedule, or blanket sums (depending on insurer)
Machinery Breakdown vs Property Insurance: Avoiding Dangerous Gaps
A common misunderstanding is assuming your standard property insurance will cover machinery failure. In many cases, property insurance responds to “insured perils” such as fire, flood, storm, theft and accidental damage (depending on your policy). But it may not respond to internal breakdown.
Machinery breakdown insurance is built for internal mechanical and electrical failure - the type of incident that can happen without any external cause. If a spindle fails, a servo drive burns out, a compressor seizes, or a critical bearing collapses, you may have a significant repair bill and no cover unless breakdown is in place.
The best solution for many manufacturers is a combined approach: property cover for external perils, machinery breakdown for internal failure, and business interruption to protect income from both scenarios.
Examples Where Property Cover May Not Respond
- Spindle or bearing failure from sudden breakdown
- Servo/drive failure not caused by fire or external damage
- PLC/control unit faults that stop the line
- Compressor seizure causing production shutdown
- Hydraulic system failure in press brakes
- Internal component failure in laser cutting heads (policy dependent)
Your insurance should be designed around how failures occur in your plant - not around assumptions.
Where Machinery Breakdown Can Be Especially Valuable
- High-value CNC machines where a single repair can be substantial
- Single points of failure (one machine that everything depends on)
- Tight delivery schedules with rejection/penalty clauses
- Complex control systems and automation
- Lean production environments with minimal buffer stock
- Specialist parts with long lead times
If downtime is the real killer, it’s worth structuring cover around business interruption and increased costs of working.
Common Causes of CNC & Equipment Breakdown
Insurers don’t just price on machine value - they also consider how breakdown happens and what controls you have in place. Being clear about your maintenance routines, engineering support and operating environment can help you secure better terms.
Mechanical Failure
- Bearing and spindle failure
- Ball screw wear and sudden failure
- Gearbox issues and lubrication failure
- Hydraulic leaks and pump failure
- Coolant system faults and overheating
- Compressor seizure or air dryer failure
- Vibration or misalignment leading to component damage
Even with strong maintenance, sudden failure can still occur - and the financial impact can be immediate.
Electrical / Electronic Failure
- Servo drive failure and motor faults
- Power supply and transformer issues
- Control panel faults and wiring failures
- Encoder/sensor failure impacting accuracy
- PLC faults causing line stoppage
- Voltage spikes/surges damaging electronics (if included)
- Cooling fan failure leading to overheating of control units
CNC and automated lines rely heavily on electronics - which can create significant downtime even for “small” failures.
Breakdown Is Not Just a Repair Cost - It’s a Delivery Risk
Manufacturers often feel breakdown most sharply through schedule disruption. If your machine fails on a critical run, you may have to choose between losing the job, paying overtime, outsourcing to a competitor, or breaching a contract. That’s why many businesses focus on cover extensions such as increased cost of working and business interruption.
The right policy can help fund urgent engineers, rapid parts delivery, temporary machine hire, and subcontracting - all aimed at keeping customer commitments and protecting margins.
“When our main CNC spindle failed, the repair and emergency engineering costs would have hit cashflow hard. The breakdown cover helped us get back online quickly and protect our delivery schedule.”
Director, UK Precision Fabrication BusinessBusiness Interruption for Machinery Breakdown: Protecting Your Income
Repair costs are only part of the story. The bigger financial threat can be lost production and lost margin. Business interruption (BI) is designed to protect your gross profit when an insured event causes downtime.
Depending on how your programme is structured, machinery breakdown BI can cover the loss of income resulting from a breakdown incident, and can also include increased cost of working - expenses you reasonably incur to reduce the interruption (such as overtime, temporary plant hire, or outsourcing).
What BI Can Help With
- Loss of gross profit due to production stoppage
- Fixed costs that continue during downtime (rent, wages, utilities)
- Overtime to catch up once the machine is repaired
- Temporary equipment hire
- Outsourcing/subcontracting to meet delivery deadlines
- Express freight for parts and urgent engineer call-outs (if included)
BI is one of the most valuable add-ons for manufacturers who rely on single machines or tightly scheduled production.
Choosing the Right Indemnity Period
The indemnity period is how long BI will pay for after an insured incident. For machinery breakdown, this should reflect:
- Time to diagnose and source parts
- Engineer availability and repair timeframe
- Lead times for specialist components
- Testing, calibration and recommissioning time
- Your realistic catch-up period to restore output
If your supply chain is exposed to long lead times, choosing too short an indemnity period can leave a major gap.
What Insurers Need to Quote Machinery & CNC Breakdown Insurance
Accurate breakdown cover starts with accurate information. Most insurers will want a schedule of equipment and an overview of your maintenance approach. If you operate multiple sites, or if you have “single points of failure”, it’s especially important to structure the sums insured correctly.
Typical Details Required
- Equipment schedule: make/model, year, serial (if available)
- Replacement values (not just book values)
- Critical machines vs non-critical machines
- Maintenance routines and service contracts
- In-house engineering capability vs external providers
- Operating hours / shifts and intensity of use
- Previous breakdown incidents / claims history
Good Risk Presentation Helps Pricing
- Preventative maintenance logs and planned servicing
- Calibration and inspection routines (where applicable)
- Environmental controls (dust extraction, temperature control)
- Power protection: surge protection/UPS (where relevant)
- Operator training and safe operating procedures
- Spare parts strategy for critical machines
The goal is to show insurers you manage breakdown risk actively - which can support broader cover and better terms.
How to Get Machinery & CNC Breakdown Insurance
Whether you’re a small fabrication workshop with a handful of machines or a multi-site manufacturer with a complex production line, the steps are similar - but the detail matters. Insure24 makes it simple:
- 1. Provide your machine schedule – list the key machines you rely on and their replacement values
- 2. Identify single points of failure – highlight machines that stop production if they fail
- 3. Confirm maintenance arrangements – servicing, inspection routines, service contracts
- 4. Choose cover scope – mechanical, electrical, controls/electronics and optional extensions
- 5. Add downtime protection – business interruption and increased cost of working
- 6. Align sums insured – per machine or blanket amounts, based on how you operate
- 7. Review policy terms – understand exclusions, security/maintenance conditions and claims steps
- 8. Bind cover – documents issued and cover live, with support when you need it
FREQUENTLY ASKED QUESTIONS
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What is machinery and CNC breakdown insurance?
Machinery and CNC breakdown insurance is designed to cover the cost of repairing or replacing insured plant and equipment following sudden and unforeseen mechanical or electrical breakdown, subject to policy terms and exclusions. It can be extended to include downtime protection through business interruption and increased cost of working.
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Will my standard property insurance cover internal machine failure?
Often not. Property insurance typically covers external perils (such as fire, flood, storm or theft), while machinery breakdown is intended to cover internal mechanical/electrical failure. The best approach is to review your policy wording and ensure breakdown risks are insured appropriately.
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Does breakdown insurance cover CNC controls, PLCs and electronics?
It can, depending on the insurer and how the equipment is scheduled. Some policies provide broad cover for electrical and electronic components, while others may apply conditions or sub-limits for certain control systems. We help you arrange cover aligned to your equipment and risk profile.
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Can I insure the loss of income caused by machine downtime?
Yes. Business interruption cover can protect your gross profit during downtime caused by an insured breakdown event, and increased cost of working can help fund reasonable expenses such as overtime, temporary equipment hire or outsourcing to keep orders moving.
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What information do you need to quote machinery breakdown insurance?
Typically: a machine/equipment schedule (make/model/year if available), replacement values, how the plant is used (shifts/hours), maintenance arrangements, and claims history. For BI quotes, we may also ask about turnover, dependencies and expected repair lead times.
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Is there a maintenance requirement for breakdown policies?
Insurers commonly expect reasonable maintenance, servicing and safe operation. Some policies include conditions relating to inspections or servicing schedules. Clear maintenance records can help underwriting and support smoother claims handling.
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Can breakdown cover be arranged for older CNC machines?
Often yes, but the underwriting approach can vary by age, condition and maintenance history. Some insurers apply different terms or require additional information for older machines. We can approach suitable markets depending on your setup.
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How quickly can Insure24 arrange cover?
Once we have your equipment schedule and key business details, we can usually progress quotes quickly. If you need cover urgently for a new machine purchase, finance agreement or contract requirement, call us and we’ll prioritise your request.