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INSURANCE FOR TOOLMAKERS & PRECISION ENGINEERING BUSINESSES
Toolmaking is high-value, high-precision work — often with tight tolerances, demanding contracts and serious consequences if a tool fails. We arrange insurance packages designed around jigs, fixtures, dies, moulds and bespoke tooling risk.
What is Toolmaking, Jigs & Fixtures Engineering Insurance?
Toolmaking businesses face a unique blend of risks: high-value precision machinery, specialist tooling and materials, bespoke one-off designs, strict acceptance testing, and customer dependencies where a failed tool can stop a production line.
A specialist insurance package combines the right protections for property and machinery, liability, and business interruption — and, where you provide design/specification advice, Professional Indemnity. The best packages also address contract work, tooling in transit, and customer-owned tools in your care.
Who Needs This Cover?
This cover is designed for businesses that manufacture or maintain tools and fixtures used in production environments. If your work influences production quality, output or safety — your risk profile is more than “general engineering”.
- Toolmakers (dies, moulds, press tools, cutting tools)
- Jigs and fixtures manufacturers
- Precision machining and CNC workshops
- Automotive / aerospace tooling suppliers
- Injection mould tool manufacturers and maintainers
- Stamping / press tooling and die repair
- Prototype tooling and R&D engineering
- Calibration / measurement and inspection tooling providers
If you hold customer-owned tools (customer’s moulds, dies or jigs stored at your premises), or you work on-site at a customer facility, you may also need extensions for:
- Customer goods in your care, custody and control
- Tooling in transit / off-site
- Contract works / engineering projects
- On-site risks and principal’s indemnity requirements
What Should a Toolmaking Insurance Package Include?
Toolmaking risks usually sit across four pillars: (1) the workshop and assets, (2) the people and liability exposures, (3) production continuity, and (4) design/specification responsibility. The right structure depends on whether you are build-to-print, design-and-build, or maintain/repair customer tooling.
Property, Machinery & Workshop Risk
- Buildings / tenants improvements – workshop, offices, electrical systems and fit-out.
- Contents & plant – benches, racking, compressors, extraction, metrology equipment.
- High-value machinery – CNC mills, lathes, EDM (wire/sinker), grinders, CMMs.
- Stock & materials – tool steel, carbide, consumables, inserts, cutting fluids.
- Theft & security – specialist tooling and small high-value equipment risk.
- Engineering inspection / breakdown – sudden mechanical/electrical failure options.
Liability, People & Legal Exposure
- Employers’ Liability – compulsory cover for employee injury/illness claims.
- Public Liability – visitors and third parties on premises or arising from your operations.
- Products Liability – if tools/components cause injury or property damage.
- Care, custody & control – customer tools/goods at your premises (where added).
- Legal expenses (optional) – employment disputes, contract disputes (wording dependent).
Business Interruption & Production Dependency
Toolmakers are often “single point of failure” suppliers. If your shop is down, your customer’s line can stop. Business interruption cover protects your own gross profit after insured damage, and can be structured to include increased cost of working (overtime, hire-in plant, subcontract machining).
- Gross profit / revenue protection after insured damage
- Increased cost of working to keep deliveries moving
- Longer indemnity periods for specialist machine lead times
- Optional BI from machinery breakdown (where arranged)
Professional Indemnity (Design & Specification Risk)
If you design tooling or provide advice that a customer relies upon, Professional Indemnity can be crucial. Tool design errors can cause scrap, downtime, rework, delays and consequential losses. PI is particularly relevant where you:
- Design jigs/fixtures or tooling systems
- Provide CAD/CAM programming as a deliverable
- Specify materials, tolerances or safety requirements
- Sign-off acceptance testing or performance guarantees
- Support commissioning and process optimisation
Common Claim Scenarios for Toolmakers
A strong insurance package is designed around real events — not generic wording. Here are scenarios that regularly impact toolmaking and precision engineering businesses.
1) Fire or electrical event damages machines and tooling
A fire, electrical fault or coolant-related incident damages CNC machines, EDM equipment, CMMs and finished tools. Production stops, customers chase delivery dates, and replacement parts have long lead times.
- Property cover for machinery, contents, tools and stock
- Business interruption for lost gross profit and ongoing costs
- Increased cost of working to subcontract work or hire in capacity
2) Customer-owned tools are damaged while in your care
A customer’s mould or die is stored at your premises for maintenance. It is damaged by handling, a machine incident, theft or fire. Standard property insurance may not automatically cover customer property unless specifically included.
- Care, custody and control / customers’ goods extensions (where arranged)
- Clear values and evidence of security/storage controls help underwriting
3) Tool failure causes damage on a customer’s production line
A die, fixture or jig fails and causes damage to a customer’s machinery or results in unsafe operation. Products liability may respond where there is third-party property damage, subject to policy terms. If the allegation is primarily “design error” causing financial loss, Professional Indemnity may be relevant.
- Products Liability for injury/property damage claims
- Professional Indemnity for design/specification allegations (if arranged)
- Contract review is important to avoid uninsured liabilities
4) Loss of a critical machine stops output
Your only wire EDM, grinder or CMM fails. The downtime triggers missed delivery dates and lost margin. Engineering breakdown and BI due to breakdown can be structured to protect against this scenario.
- Machinery breakdown cover (where added)
- Optional business interruption caused by breakdown
- Increased cost of working for hire-in or subcontracting
What Insurers Look At When Quoting Toolmaking Insurance
Underwriters want to understand your processes, the value and criticality of your machinery, and whether your work includes design responsibility. The more accurately you present the risk, the stronger the chance of good terms.
Core rating factors
- Turnover split (manufacture vs design vs repair/maintenance)
- Customer sectors (automotive, aerospace, medical, general industrial)
- Highest-value machines and total sum insured
- Security, fire protections and housekeeping
- Quality systems and traceability (ISO 9001 etc.)
- Claims history and steps taken after incidents
Helpful info for faster quotes
- Machinery list: make/model/age/value and maintenance regime
- Max customer tool value held on site (and storage method)
- Contractual requirements (limits, endorsements, territories)
- Export exposure (if tools go overseas)
- Any on-site installation/commissioning work
- CAD/CAM and design sign-off process (if applicable)
“Our tooling and EDM equipment is the heart of the business. Insure24 helped us structure property, breakdown and liability cover around real production risks — not generic wording.”
Director, Precision Toolmaking CompanyFREQUENTLY ASKED QUESTIONS
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Do toolmakers need Professional Indemnity insurance?
If you design tooling, provide specifications, CAD/CAM deliverables or advice that customers rely upon, Professional Indemnity can be important. If you are strictly build-to-print with no design responsibility, it may be less critical — but contracts often blur the lines, so it’s worth reviewing.
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Will property insurance cover high-value CNC and EDM machines?
Yes, typically, provided they are declared correctly with accurate sums insured. For sudden mechanical or electrical failure, you may also need machinery breakdown (engineering) cover as an extension or separate section.
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Can I insure customer-owned tools stored at my premises?
Often yes, but you usually need a specific extension for customers’ goods in your care, custody and control, with declared limits and appropriate security/storage arrangements.
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Does liability insurance cover damage caused by a failed jig or fixture?
Products liability can cover third-party injury or property damage caused by products you supply, subject to terms. If the allegation is primarily a design/specification error causing financial loss, Professional Indemnity may be relevant if arranged.
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Can I include business interruption for long machine lead times?
Yes. Many precision engineering businesses select longer indemnity periods due to the specialist nature of machinery and the time required to recover capacity. The right period depends on your dependency on specific machines and supply chain lead times.
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Do I need cover for tooling in transit?
If you deliver tools to customers or move customer tooling between sites, goods in transit cover can be important. Terms vary based on whether you use your own vehicles or couriers and the value of items moved.
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How quickly can Insure24 arrange toolmaking insurance?
Many quotes can be produced quickly once we have clear information on turnover, processes, machinery values, premises protections and claims history. Where Professional Indemnity or customer goods are involved, insurers may request additional detail.