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We compare specialist engineering & manufacturing insurers
INSURANCE FOR CNC MACHINE SHOPS — BUILT AROUND REAL RISKS
Why CNC Precision Engineering Needs Specialist Insurance
CNC precision engineering is high-value, high-accuracy, and high-consequence. A small tolerance error can become a major downstream failure once a component is installed in a wider system. At the same time, CNC operations concentrate value in a few key assets: machining centres, lathes, mills, EDM/wire EDM, laser measuring equipment, CMM inspection tools, tooling, fixtures, and the skilled team needed to run them.
Standard “small business” insurance packages often fail to reflect the realities of CNC manufacturing: tight delivery schedules, supplier dependency, expensive raw materials, specialist tooling, and the risk of contract disputes when a customer rejects a batch or a part fails in service. Insure24 arranges CNC precision engineering insurance that is tailored to your actual activities — whether you are a subcontract CNC shop, a high-precision aerospace supplier, or a manufacturer producing your own engineered products.
CNC Machine Shop Insurance (UK) – What We Cover
CNC engineering businesses can look similar on paper, but insurers assess them very differently depending on what you make, who you supply, and how the parts are used. Precision engineering may include CNC turning, milling, multi-axis machining, grinding, EDM, tooling manufacture, prototyping, batch production, medical components, automotive parts, aerospace components, defence supply chain work, and everything in between.
The right insurance programme usually combines: liability cover (public/products), employers’ liability, property and stock cover, business interruption, and (critically) machinery breakdown for key CNC assets. If you design, modify specifications, or provide engineering advice, professional indemnity may also be appropriate — even if you “only” manufacture physical parts.
Core Covers for CNC Precision Engineering
Legal & Essential Covers
- Employers’ Liability (generally required if you employ staff)
- Public Liability (third-party injury/property damage)
- Products Liability (claims arising from parts you supply)
- Property / Contents (tools, fixtures, office equipment, small plant)
- Stock & Materials (raw materials, WIP, finished goods)
- Goods in Transit (deliveries, couriers, high-value items)
Specialist Covers CNC Firms Often Need
- Machinery & Equipment Breakdown (CNC machine failure, arcing, drive/motor issues)
- Business Interruption (loss of gross profit if production stops)
- Deterioration of Stock (where temperature-sensitive materials apply)
- Professional Indemnity (design/specification advice, drawings, modifications)
- Contract Works (bespoke projects, prototypes, client-owned items)
- Cyber & Data (CAD files, CAM/ERP systems, ransomware)
Products Liability for CNC Machined Parts
Products liability is essential for CNC precision engineering. If a machined component fails and causes injury or property damage, a claim could be made against the manufacturer and supply chain. Liability can arise even where you followed a customer drawing — for example, if a process issue, material substitution, traceability failure, or tolerance deviation contributes to failure in service.
Examples of Products Liability Claims
- A component fractures and damages other machinery
- A part causes a leak leading to property damage
- Incorrect tolerances cause overheating or mechanical failure
- A surface finish issue causes premature wear and failure
- Contamination or swarf leads to system damage
The aim is not only to “have a policy.” It’s to match limits, territories, and wording to your real supply chain. Aerospace/defence/medical supply chains typically demand higher limits and strict quality expectations.
Common Gaps We Help You Avoid
- Assuming products liability pays to remake rejected batches (often not insured)
- Not declaring exports or overseas jurisdictions
- Contract clauses pushing “fitness for purpose” beyond reasonable control
- No clarity on heat treatment, plating, coating or outsourced processes
- Not scheduling high-value customer goods in your custody
We’ll structure cover and set expectations so your insurance responds to third-party injury/property damage exposures, while you manage commercial “rework” risk through quality controls and contract terms.
Machinery & Equipment Breakdown for CNC Assets
A CNC shop’s biggest concentration of risk is often its machines. If a machining centre goes down, you don’t just face the repair bill — you face missed deliveries, overtime, outsourcing costs, and customer relationship damage. Standard property policies focus on perils like fire and theft. Machinery breakdown cover is designed for sudden and unforeseen internal failure.
Breakdown Risks CNC Businesses Face
- Spindle failure, bearing seizure, axis damage
- Drive and motor burnout, electrical arcing/short circuit
- Control system faults (PLC/CNC controller issues)
- Hydraulic/pneumatic failure causing internal damage
- Coolant system failure leading to damage or scrap
- Chiller/compressor failure affecting production utilities
We’ll help schedule key machines correctly and choose a cover structure that makes sense for your downtime exposure.
Downtime: Add BI Where It Matters
The most valuable extension for many CNC businesses is business interruption linked to breakdown or damage. This can support:
- Loss of gross profit while production is reduced
- Increased cost of working (outsourcing, overtime, extra shifts)
- Express freight / urgent parts delivery
- Temporary hire of equipment (where feasible)
The right indemnity period matters. Some CNC repairs are quick; others involve long lead times for parts or specialist service engineers.
Property, Stock, Materials & Goods in Transit
Precision engineering often involves high-value materials (specialist steels, titanium, aluminium billets, exotic alloys), customer-supplied materials, and work-in-progress that can represent substantial value in a small physical footprint. Your insurance must reflect the reality of what you hold on-site at any given time — including peak periods and customer-owned goods where you assume responsibility.
What You Might Need to Insure
- Raw materials (including high-value alloys)
- Work-in-progress (parts mid-process, fixtured, awaiting inspection)
- Finished goods awaiting dispatch
- Tools, fixtures, jigs and specialist gauges
- Office equipment and IT
- Customer goods in your custody (where agreed/declared)
Transit & Off-Site Exposure
- Goods in transit (own vehicles or courier)
- Parts sent for heat treatment, plating or coating
- Temporary storage at third-party premises
- Collection/delivery risks on loading bays
- Tooling moved between sites (if applicable)
We’ll help you map your real material flow so you don’t discover after a loss that a key step (e.g., off-site processing) wasn’t insured.
Professional Indemnity for CNC Engineering (If You Design, Modify or Advise)
Many CNC businesses provide more than machining. You may help optimise designs for manufacturability, adjust tolerances, propose material changes, create prototypes, or provide inspection sign-offs and certification support. These activities can create exposure to claims for financial loss that do not involve injury or property damage — which is where professional indemnity becomes relevant.
PI Triggers in CNC Work
- Design-for-manufacture advice (tolerance/material recommendations)
- Customer drawing changes proposed and accepted
- Prototype design iterations and engineering input
- Inspection / certification support where relied upon
- Programming/CAM errors causing client loss (depending on scope and wording)
PI isn’t always required — but when it is, it’s typically because your role includes professional judgement, not just manufacturing to print.
How to Improve PI Terms
- Clear scope of work and acceptance of customer drawings
- Documented change control (who approved what, and when)
- Quality management processes and traceability
- Inspection records and calibration evidence
- Well-defined contract terms (limit consequential loss where possible)
Employers’ Liability & CNC Workshop Safety
EL is often mandatory, but it’s also one of the most likely lines to generate claims in workshop environments. CNC businesses typically manage risk well, but the hazards are real: moving machinery, manual handling, cutting tools, swarf, coolant, noise, vibration, forklifts and lifting gear, and hot works.
Common EL Risk Areas in CNC Shops
- Manual handling and repetitive strain injuries
- Swarf/coolant exposure and dermatitis risks
- Noise exposure and hearing protection requirements
- Slip/trip hazards (coolant leaks, swarf on walkways)
- Forklift movements and loading bay incidents
- Lifting operations (LOLER compliance where applicable)
Good training, housekeeping, machine guarding and documented procedures reduce incident risk and help secure competitive insurance terms.
Business Interruption: Protect Turnover if Production Stops
CNC businesses often operate on tight margins, high utilisation and strict delivery schedules. A single insured event can cut turnover instantly while fixed costs continue (rent, rates, salaries, finance, utilities standing charges). Business interruption cover is designed to protect gross profit and fund increased costs to keep trading.
Choosing a realistic indemnity period is crucial. If your shop relies on a small number of high-value machines, repairs or replacements may take longer than expected — especially if parts or specialist engineers have lead times.
BI Can Cover
- Loss of gross profit during interruption
- Standing charges and continuing expenses
- Increased cost of working (outsourcing, overtime, extra shifts)
- Supplier/customer extensions (where your turnover depends on them)
- Utilities interruption extensions (where available)
We’ll help calculate sums insured properly to reduce underinsurance risk and ensure claim settlements aren’t reduced by “average”.
BI Works Best When Linked to Real Downtime Scenarios
- Fire/smoke damage impacting machines and electrics
- Flood/escape of water affecting the shop floor
- Theft of tooling, machines, copper, or high-value alloys
- Machinery breakdown (when packaged correctly)
- Loss of power to critical systems
Your BI should be designed around what would realistically stop you producing — not a generic template.
How to Reduce Premiums & Improve Terms for CNC Insurance
CNC firms with strong process control typically achieve better insurance outcomes. Insurers want evidence you can prevent losses and recover quickly. Here are practical steps that often improve underwriting outcomes:
Quality & Traceability
- Documented inspection regime and calibration records (CMM, gauges)
- Material traceability and supplier approvals
- Change control for drawings and CNC programs
- Non-conformance handling and corrective actions
- Clear sign-off procedures for first-off inspection
Site Risk Controls
- Good housekeeping to control swarf and coolant leaks
- Electrical inspections and evidence of maintenance
- Hot works controls for any welding/cutting on site
- Security: alarms, CCTV, physical barriers for high-value stock
- Spare parts strategy for key CNC machines (or supplier SLA)
If you can show resilience, insurers are more confident — which often means more competitive pricing and fewer restrictions.
Why Choose Insure24 for CNC Precision Engineering Insurance?
- Engineering-aware broking: We understand CNC operations, downtime risk and supply chain realities.
- Correct policy structure: Align PL/Products, BI and breakdown so the programme works as a whole.
- Contract-ready support: Help meeting client requirements for limits and evidence of insurance.
- Fast quoting: Efficient placement once your activities, values and contracts are clear.
- Claims support: Practical guidance if you need to act fast after an incident.
Whether you’re a small CNC job shop or a multi-site precision manufacturer, we’ll help you arrange cover that matches your actual exposures.
FREQUENTLY ASKED QUESTIONS
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What insurance does a CNC machine shop need in the UK?
Most CNC businesses need employers’ liability (if employing staff), public liability, products liability, property/contents and stock cover, and business interruption. Many also benefit from machinery & equipment breakdown cover for key CNC machines and utilities.
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Does products liability cover rejected parts or rework?
Usually not. Products liability is primarily designed for third-party injury or property damage caused by your product. Pure “rework” or batch rejection costs without injury or property damage are often considered a commercial/quality issue rather than an insured liability claim.
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Do CNC businesses need machinery breakdown insurance?
Often yes, especially if you rely on a small number of high-value machines. Machinery breakdown cover is designed for sudden mechanical or electrical failure (spindle/bearing issues, motor burnout, control faults) which may not be covered under standard property policies.
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When is professional indemnity needed for CNC engineering?
If you provide design input, modify drawings/specifications, advise on tolerances/materials, create prototypes, or provide engineering judgement that a client relies on, professional indemnity may be appropriate to protect against claims for financial loss due to alleged professional negligence.
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How do insurers price CNC precision engineering insurance?
Insurers typically consider your turnover, what you manufacture, end-use industries, claims history, premises protections, quality controls, export exposure, and the values/age of machinery and stock. Strong risk management and good documentation can materially improve terms.
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Can Insure24 help meet customer contract insurance requirements?
Yes. We can help align limits, territorial/jurisdiction settings and evidence of insurance to customer requirements, and highlight contract clauses that commonly create gaps (fitness for purpose, uncapped liability, broad indemnities and liquidated damages).