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ENGINEERING COVER FOR CRITICAL CNC PRODUCTION EQUIPMENT
Why Machinery Breakdown Insurance Matters for Precision Engineering
Precision engineering firms rely on expensive, high-utilisation machines with tight tolerances and long lead times for parts and service engineers. A spindle failure, servo fault, power surge, coolant system issue or control malfunction can stop production instantly — often with significant knock-on costs: missed deliveries, expedited shipping, overtime, subcontracting and rejected parts.
Standard property insurance typically covers “external events” such as fire and flood, but it often excludes sudden mechanical or electrical breakdown. Engineering and machinery breakdown cover is designed specifically for these internal failure events — and can be extended with business interruption or expediting options, depending on the insurer and policy structure.
What CNC & High-Value Machinery Breakdown Insurance Can Cover
Coverage varies by insurer, but machinery breakdown policies are typically designed to cover sudden and unforeseen damage caused by mechanical or electrical failure. For CNC-driven operations, the most important aspect is ensuring the policy responds to your critical equipment and the way it fails in real life.
- Mechanical breakdown – e.g., spindle failure, bearing damage, drive systems, pumps and motors.
- Electrical breakdown – e.g., control panel faults, wiring, power supply issues, PCB failure, drives and inverters.
- Control system failures – CNC controls, PLCs, HMIs and associated electronics (subject to policy terms).
- Repair and replacement costs – parts, labour and specialist engineers (excess and conditions apply).
- Consequential damage – options to extend cover where breakdown causes further physical damage.
- Hire equipment / temporary plant – optional support to keep production moving (where available).
- Expediting expenses – rush freight, overtime and urgent sourcing of parts to reduce downtime (where included).
- Machinery BI – business interruption following insured breakdown events (separate or extended cover).
Which Machines Can Be Covered?
Most policies can be designed to cover named items of plant, groups of machinery, or all eligible equipment at a site. Precision engineering businesses typically want to focus on high-value, high-dependency machines and supporting systems.
Common CNC & Precision Engineering Equipment
- CNC mills, lathes and multi-axis machining centres
- EDM machines (wire and sinker)
- Grinding and finishing equipment
- Robotics and automation cells
- CMM and metrology/inspection equipment
- Compressors, pumps and critical utilities plant
- Heat treatment, ovens and process equipment (where relevant)
Supporting Systems That Matter
- Power supply and surge protection arrangements
- Coolant and lubrication systems
- Air supply and filtration systems
- Tooling and fixtures (policy-dependent)
- Software, parameters and backups (cyber/OT overlap)
- Maintenance and inspection documentation
Common CNC Breakdown Scenarios
Understanding how your machines fail helps ensure the insurance programme is built to respond. Below are typical breakdown incidents in precision engineering environments.
Spindle & Drive Failure
Spindles operate at high speed and are sensitive to wear, lubrication issues and impact damage. Failure can require specialist repair and calibration, with long downtime if parts are scarce.
- Repair or replacement costs
- Specialist engineer labour and commissioning
- Expediting expenses options
Electrical Fault / Power Surge Damage
Voltage spikes and electrical faults can damage control boards, drives and power supplies. Repairs may require OEM parts and factory-trained engineers.
- Electrical breakdown cover
- Control panel and CNC controller repair
- Condition/maintenance requirements considered
Coolant/Lubrication System Failure
Pump failures, blockages or contamination can cause overheating and consequential mechanical damage. Early detection and documented maintenance can improve outcomes.
- Breakdown-related damage assessment
- Potential consequential damage extensions
- Reduced downtime through expediting
Automation / Robot Cell Failure
Robotics and automation failures can stop multiple machines at once. Cover can be structured to include key automation systems and the physical equipment they control.
- Named automation systems included in schedule
- Repair/replacement of robotics components
- Machinery BI options for multi-machine disruption
Our five-axis CNC went down and the downtime risk was huge. Insure24 helped us arrange engineering cover with expediting options so we could get back online fast.
Managing Director, UK Precision Engineering FirmHow to Arrange CNC Machinery Breakdown Insurance
Engineering cover is underwritten based on what you run, how you maintain it, and how exposed you are to downtime. The more clearly you can describe your machinery schedule and controls, the better the insurer can price and support the risk.
- 1. List key machines – model, age, value, and the role each machine plays in production.
- 2. Confirm maintenance – inspection regimes, service contracts, calibration and record keeping.
- 3. Identify downtime exposure – what a day/week offline costs and whether alternatives exist.
- 4. Choose extensions – expediting costs, hire equipment, and machinery BI where needed.
- 5. Compare specialist insurers – engineering markets suited to precision manufacturing.
FREQUENTLY ASKED QUESTIONS
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Does property insurance cover mechanical breakdown?
Usually not. Property insurance is generally designed for external perils (fire, flood, storm).
Mechanical or electrical breakdown is typically covered under engineering/machinery breakdown policies.
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Can I include CNC controls and electronics?
Often yes, subject to insurer terms and the definition of insured machinery.
Disclosing control systems and maintenance arrangements helps ensure cover is appropriate.
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Can machinery breakdown include loss of profits?
Machinery business interruption (BI) can be added to cover loss of income following insured breakdown,
subject to waiting periods and limits. It may be separate or an extension depending on insurer.
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What information do you need to quote?
Typically: a machinery schedule (type, model, age, value), maintenance and service arrangements,
claims history, and an indication of downtime exposure. We’ll keep it practical and underwriting-ready.
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How can I reduce premiums and improve terms?
Strong maintenance records, planned servicing, electrical protections, operator training and sensible
risk management help insurers price more confidently. We can also review deductibles and extensions
to optimise overall cost.