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PUBLIC LIABILITY THAT MATCHES WORKSHOP & SITE RISKS
Why Precision Engineering Businesses Need Public & Third-Party Liability Cover
Precision engineering workshops are busy environments: machine guarding, swarf, cutting fluids, extraction systems, lifting equipment, forklifts, deliveries in and out, and customers or contractors visiting site. Many businesses also work away at customer premises to install, test, service, or commission equipment. Public (third-party) liability insurance is designed to protect your business if you’re alleged to have caused injury to a third party or damage to their property.
Public & Third-Party Liability Insurance (UK Precision Engineering)
Public liability (also called third-party liability) is one of the core covers for most precision engineering and manufacturing businesses. It helps protect against claims from people who are not your employees — such as customers, visitors, delivery drivers, contractors, neighbouring businesses, or members of the public — who allege they were injured or their property was damaged due to your negligence.
For precision engineering, the real-world risk is not just a slip on a wet floor. It’s often related to the operational environment: forklift movements, loading bays, extraction systems, cutting fluids, hot works, heavy parts, test rigs, and working on customer sites. The right public liability cover should match how you actually operate, including work away and the types of third-party property you could damage.
Insure24 helps precision engineering businesses arrange cover with appropriate limits and wording, aligned to contract requirements and day-to-day site realities. We also help identify where public liability ends and where other covers begin — for example, products liability (after you supply a product), professional indemnity (design/spec/advice), and employers’ liability (injury to employees).
- Third-party injury – visitors, contractors, customers, delivery drivers and members of the public.
- Third-party property damage – vehicles, customer premises, neighbouring property, hired equipment.
- Work away – installation, testing, servicing and commissioning at customer sites.
- Loading/unloading risk – deliveries, forklift operations, loading bays and yard movements.
- Contract limits – many customers specify minimum PL limits (often £2m/£5m/£10m).
- Territory considerations – UK-only vs overseas work and jurisdiction requirements.
What Does Public Liability Cover for Precision Engineering?
Public liability insurance is designed to cover legal liability for third-party injury and third-party property damage arising from your business activities, subject to policy terms, conditions and exclusions. The key words are “legal liability” — meaning a claim typically alleges negligence, and insurers respond by handling defence and paying damages/compensation (up to the policy limit) where you are legally liable.
In precision engineering, claims often arise from site conditions and operational activities rather than the product itself (which would be products liability). Below are typical areas of cover and the real-world scenarios they relate to.
Third-Party Injury (Onsite)
- Visitors to your workshop – customers, auditors, supplier reps, or contractors injured on site.
- Slips, trips, and falls – wet floors, swarf, cables, uneven surfaces, yard hazards.
- Falling objects – lifting operations, racking, heavy parts, tooling.
- Vehicle movements – yard and loading bay incidents involving third parties.
- Contractor injuries – third-party contractors injured while working at your premises.
Third-Party Property Damage (Onsite & Nearby)
- Damage to customer/supplier vehicles – during loading/unloading or yard movements.
- Damage to neighbouring premises – for example from an incident that spreads beyond your unit.
- Damage to hired-in equipment – where liability extends to third-party property (subject to wording).
- Contractor property damage – tools/equipment damaged due to your negligence.
- Pollution/contamination events – often restricted unless specifically included.
Work Away / Customer Site Liability
Many precision engineering businesses carry out work away: installation, servicing, calibration, testing, machine moves, on-site repair, or commissioning. These activities increase exposure because you operate in unfamiliar environments, around third parties, and often near customer assets.
- Damage to customer property – accidental damage during installation or service.
- Injury to third parties on site – customers, contractors, or visitors near your work area.
- Hot works – welding/cutting risks require disclosure and controls if applicable.
- Testing and demonstrations – ensure the policy scope matches the work performed.
Defence Costs & Legal Support
Public liability claims are not just about compensation. Defence costs can be significant — particularly where the allegation is disputed or where multiple parties are involved. Public liability insurance typically includes legal defence costs (subject to wording) which can be crucial for protecting your business.
- Claims handling – insurer-appointed solicitors and claims teams manage the process.
- Investigation costs – expert evidence and incident investigation support.
- Negotiation/settlement – where appropriate to resolve claims commercially.
What Public Liability Typically Doesn’t Cover (Common Exclusions)
Understanding exclusions helps prevent nasty surprises. Public liability is designed for third-party injury and property damage. It usually does not cover issues that sit in other policy sections (for example, damage to your own property, injuries to employees, or pure financial loss). Below are common exclusions and where you may need additional cover.
Common PL Exclusions
- Employee injury – handled under Employers’ Liability.
- Damage to your own property – handled under property/engineering cover.
- Pure financial loss – often excluded unless linked to injury/property damage (PI may be needed).
- Contractual liability – liability assumed under contract beyond common law can be excluded.
- Products claims after supply – usually require products liability section.
- Pollution – often restricted unless specifically included.
Common Policy Gaps for Precision Engineering
- Work away not declared – onsite customer work sits outside scope if not included.
- High-risk activities – hot works, lifting operations, or working at height may need disclosure/controls.
- Territory/jurisdiction – overseas work may be excluded if UK-only is selected.
- Limits too low – contract requirements exceed the policy limit.
- Customer property exposure – may need “goods held in trust” or specific endorsements.
Practical fix: map your work scenarios. If you ever work at customer sites, deliver/install, lift heavy parts, or do testing/demos, make sure the policy scope matches reality. Also check contracts for minimum limits and territory/jurisdiction clauses.
“We had public liability, but our contract required a higher limit and overseas cover for a commissioning visit. Once it was structured correctly, we could evidence cover quickly and keep the project moving.”
Operations Manager, Precision Engineering FirmHow Much Public Liability Cover Do Precision Engineering Businesses Need?
The “right” limit depends on your risk profile and what customers require. Many businesses choose limits aligned to common supply chain standards, but the correct answer is driven by your contracts, site risk, and the potential severity of injury/property damage claims.
Typical limits you’ll see in the market include £2m, £5m, and £10m. Certain customers or principal contractors may require higher limits. The key is making sure the limit you buy is acceptable to your customers and realistic for your exposure.
Factors That Influence Limit Selection
- Customer contracts – minimum limits stated in supply agreements.
- Footfall and visitors – how many third parties come on site.
- Work away activities – installation/servicing at customer premises.
- Nature of operations – lifting operations, moving vehicles, hazardous processes.
- Premises type – shared industrial units increase third-party property exposure.
Evidence of Cover (Certificates)
Public liability is often required to win work. Customers may ask for a certificate of insurance showing limits, territory, and policy dates. Insure24 can help you structure cover so evidence of insurance matches procurement requirements.
- Contract-ready wording – avoid mismatches between what the customer requests and what the policy states.
- Territory/jurisdiction clarity – especially where overseas work or exports apply.
- Include products where relevant – for many manufacturers, PL and products are arranged together.
PROTECT YOUR BUSINESS
- Public & third-party liability structured around workshop and work-away activities
- Appropriate limits to satisfy customer contracts and procurement requirements
- Clarity on territory/jurisdiction for overseas visits and projects
- Joined-up cover with products liability and (where needed) professional indemnity
- Advice on common exclusions and how to avoid policy gaps
- Fast quoting and certificate-ready documentation
FREQUENTLY ASKED QUESTIONS
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Is public liability the same as employers’ liability?
No. Employers’ liability covers injury/illness claims from employees (and is compulsory in most cases). Public liability covers third-party injury
and third-party property damage claims from people who are not employees, such as visitors, customers and contractors.
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Does public liability cover damage caused while working at a customer site?
Often yes if “work away” is included and the activity is within scope. It can respond to third-party property damage or third-party injury allegations
arising from your work at customer premises, subject to policy terms and exclusions.
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What limit of public liability do customers usually require?
Common requirements are £2m, £5m or £10m, but it depends on the customer and contract. Some supply chains and principal contractors may request higher limits.
We recommend checking your contracts and selecting a limit that aligns with your most demanding requirement where commercially sensible.
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Is products liability included in public liability?
Often, manufacturers arrange public and products liability together under one combined section, but it depends on the policy.
Public liability focuses on incidents arising from your business activities; products liability focuses on injury/property damage caused by products after supply.
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Does public liability cover pure financial loss or contract penalties?
Usually not. Public liability is mainly for third-party injury and property damage. Pure financial loss is often excluded unless linked to injury/property damage.
Professional indemnity may be needed for negligence and financial loss allegations arising from design/spec/advice.
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Do I need overseas cover if I visit a customer abroad for commissioning?
Possibly. Territory and jurisdiction matter. If you work abroad or visit overseas sites, your policy may need an endorsement to include those territories and,
where required by contract, the relevant jurisdiction. This should be addressed before the trip/project starts.
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What information do you need to quote public liability for precision engineering?
We typically need your turnover, activities (machining/fabrication/installation), premises details, number of visitors, whether you work away and where,
any hot works or higher-risk activities, contract limit requirements, overseas exposure, and claims history.
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How can I reduce public liability risk in a workshop environment?
Strong housekeeping, clear walkways, spill control for cutting fluids, visitor safety procedures, segregation of forklift routes, good signage,
and documented contractor controls help reduce incidents. For work away, risk assessments and method statements can also support safer operations.