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Why Steel Manufacturers Need Professional Indemnity
Many steel manufacturers are no longer “build to print” only. Increasingly, customers expect input on design, tolerances, metallurgy, suitability of grades, load calculations, compliance standards, welding procedures and performance requirements. The moment you provide technical advice, produce drawings, approve specifications, or sign off on design-related decisions, you can create a professional duty of care.
Public and products liability insurance is designed primarily for injury or property damage. It generally does not cover claims alleging a financial loss caused by a design, specification or advice error. Professional indemnity (PI) insurance is designed to fill that gap - covering legal defence costs and compensation where you are alleged to have made a negligent professional error.
Insure24 helps steel manufacturers arrange PI cover that fits modern steel operations - from service centres and processors to forging shops, rolling mills, OEM suppliers and specialist alloy manufacturers.
What Does Professional Indemnity Insurance Cover?
Professional indemnity is designed to cover claims arising from alleged negligence in professional services - including design, specification and technical advice. Cover varies by insurer and wording, but commonly includes:
- Negligent design advice or specification errors
- Incorrect selection of grade, material or treatment process
- Errors in drawings, calculations, tolerances or documented instructions
- Failure to comply with stated standards (e.g., ISO / customer specs)
- Defence costs for allegations of professional negligence
- Claims for financial loss (subject to policy terms)
PI is typically arranged on a “claims made” basis, meaning the policy in force when the claim is made is the one that responds (subject to retroactive date and policy terms).
Common Design & Specification Risk Scenarios in Steel
PI exposures in steel manufacturing often arise indirectly - a quick email confirming a grade, approving a spec, or recommending a treatment can later become central to a claim.
- Advising a customer on grade substitution or equivalency
- Design input for fabricated components or assemblies
- Tolerance or flatness guidance leading to downstream fit issues
- Heat treatment parameters affecting hardness/strength
- Incorrect test certification interpretation or reporting
- Approving customer drawings that later prove unsuitable
- Failure mode not anticipated in a performance-critical part
What Insurers Look At When Pricing Steel PI
PI for steel businesses is underwritten based on the scope of professional services and the potential size of financial losses.
Professional Services Scope
- Design responsibility vs build to print
- Whether you sign off drawings, calculations or specifications
- Use of qualified engineers and review procedures
- Industries supplied (automotive, aerospace, energy, construction)
- Contract values and criticality of supplied parts
Controls & Documentation
- Quality management systems and document control
- Written scope of services and limitation of liability clauses
- Formal change control for spec revisions
- Test certification processes and traceability
- Claims history and lessons learned
Common PI Exclusions to Watch For
The difference between “having PI” and “having the right PI” often sits in exclusions and conditions.
- Fitness for purpose or performance warranty exclusions
- Contractual liability beyond common law duty of care
- Known circumstances or prior issues (claims-made policies)
- Product recall, rework and rectification costs
- Intellectual property infringement (unless specifically included)
PI is about your professional negligence - not all quality or product issues. We’ll help you align PI with your services and contracts.
FREQUENTLY ASKED QUESTIONS
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Do steel manufacturers need professional indemnity if they don’t “design” products?
If you truly build to print with no advice, sign-off or specification input, PI may be less relevant. However, many manufacturers provide technical guidance or approve specs informally, which can create PI exposure.
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Does public/products liability cover design errors?
Usually not. Public/products liability focuses on injury or property damage. Design/specification errors often cause financial loss, delays or rework costs, which are typically addressed by PI insurance.
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What PI limit is appropriate for steel manufacturers?
PI limits vary widely. Some businesses buy £250k–£1m, while others need £5m+ due to contract values and downstream loss potential. We’ll help assess an appropriate limit based on your work and customer requirements.
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Is PI claims-made and why does that matter?
Yes. PI is usually written on a claims-made basis, meaning the policy in force when the claim is made responds (subject to retroactive date and terms). Maintaining continuous cover is important.
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Can PI be combined with other steel manufacturing covers?
PI is often arranged separately, but it can be coordinated with liability and property programmes to reduce gaps and ensure consistent disclosure and claims handling.