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REDUCING INSURANCE COSTS FOR STEEL MANUFACTURERS
Steel manufacturing is a high-severity risk class - and insurers price it based on fire/explosion potential, hot works, heavy plant, manual handling, dust and fumes, high-value machinery, and the downtime impact of a major incident. The quickest way to reduce premiums is not “shopping around harder” - it’s presenting your risk better, improving loss prevention, and structuring cover properly so you’re not paying for inefficiency, duplication or avoidable claims frequency.
Below are practical, insurer-friendly steps that can help reduce premiums over time while keeping your programme robust. Insure24 can help you prioritise improvements and present them to underwriters at renewal.
1) Improve Risk Presentation (It Matters More Than You Think)
Underwriters price uncertainty. If your submission is vague, missing details, or looks inconsistent (values don’t match turnover, processes are unclear, controls are not evidenced), insurers either decline or price defensively. A clean, complete “steel-ready” submission can widen the insurer pool and reduce the risk margin applied.
What to Include in a Strong Submission Pack
- Clear process description (casting/foundry, rolling, fabrication, heat treatment, machining etc.)
- Site layout overview and separation of high-hazard areas
- Plant and machinery schedule (values, critical machines, maintenance regime)
- Hot works controls and permit-to-work process
- Housekeeping and dust/fume extraction controls (LEV)
- Claims history narrative (what happened, what changed, prevention actions)
- Photographs of the site (insurers often find them very helpful)
A good pack can convert “maybe” into “yes” - and reduce pricing loadings.
Get Your Values Right (Avoid Underinsurance & Penalties)
- Buildings insured on rebuild cost, not market value
- Plant values reflect replacement/like-for-like
- Stock and WIP reflect peak exposure (not average)
- Business interruption sums reflect realistic gross profit exposure
Underinsurance can reduce claims settlements - and can also increase premiums if insurers believe values are “uncertain”.
2) Reduce Claims Frequency (The Fastest Route to Lower Premiums)
One poor claims year can impact pricing for multiple renewals. The goal is to reduce claims frequency and demonstrate improved risk controls. For steel manufacturers, the most common claims are often “attritional”: minor injuries, small property incidents, and theft/vandalism. These add up, and they influence insurer appetite.
Target the Claims that Happen Most Often
- EL: slips/trips, manual handling, hand injuries
- PL: minor third-party injuries, vehicle/visitor incidents
- Property: small fires, electrical faults, water damage
- Theft: tools, copper, portable equipment (site dependent)
“Small” claims are expensive in aggregate - and they raise your risk profile.
Practical Claims Management Moves
- Investigate every incident and record corrective actions
- Implement near-miss reporting with follow-through
- Refresh training and supervision in high-incident areas
- Review contractor controls and site inductions
- Consider a sensible excess strategy for attritional claims
Insurers want to see a trend: fewer incidents and evidence you’re learning from them.
3) Fire, Hot Works & Property Improvements That Insurers Reward
For steel manufacturing, property pricing is heavily influenced by fire risk and severity potential. Improving protection and demonstrating control maturity can reduce the “risk margin” underwriters add - especially if your site has hot works, combustible storage, or high-value plant.
High-Impact Fire Risk Improvements
- Formal hot works permit system with enforcement
- Electrical inspection and maintenance regime
- Housekeeping and separation of combustibles
- Dust control and extraction maintenance
- Fire detection/alarms and suitable extinguishing provision
- Clear access for fire services and hydrant provision (where applicable)
If you can evidence these controls, insurers often respond with improved terms.
Business Interruption: Reduce Severity and Premium
- Identify single points of failure (critical machines/utilities)
- Plan for alternative production routes or outsourcing options
- Hold critical spares where lead times are long
- Update BI calculations and choose a realistic indemnity period
A credible continuity plan can reduce severity and support better BI terms.
4) Cyber & OT Controls That Lower Cyber Premiums
Cyber underwriting is control-led. If you can demonstrate strong fundamentals, you’ll normally access a wider insurer pool and better pricing. For steel sites, OT matters: insurers want to know that production systems are protected and recoverable.
Cyber Controls Insurers Often Prioritise
- MFA for email, VPN and privileged accounts
- Offline/immutable backups with restoration testing
- Endpoint protection and patching (where feasible)
- Restricted remote access and vendor management
- Network segmentation (especially between IT and OT)
- Incident response plan and tabletop exercises
Improving controls can reduce premium faster than changing policy structure.
OT Recovery Planning
- Maintain a list of critical OT assets and configurations
- Ensure OT backups exist (not just IT backups)
- Vendor support agreements for restoration
- Define safe restart and commissioning steps
Clear OT recovery planning helps insurers believe downtime risk is controlled.
5) Structure Your Programme Efficiently (Pay Less Without Losing Protection)
Some cost reduction is achieved by improving risk - but some is achieved by structuring cover properly. The goal is to avoid paying for duplicated sections or carrying limits that don’t match exposure, while ensuring you don’t create dangerous gaps.
Examples of Sensible Cost Levers
- Review excess levels for attritional claims
- Separate high-risk sections where it improves insurer appetite
- Align limits to contract requirements (avoid accidental overbuying)
- Remove unnecessary extensions that don’t apply to your operations
- Update turnover/wage roll/values to reflect current reality
Underwriters prefer accurate, stable exposure data - it reduces uncertainty loadings.
Avoid These “False Savings”
- Cutting BI indemnity periods below realistic recovery time
- Underinsuring buildings/plant/stock
- Removing breakdown cover for critical plant
- Reducing liability limits below contract requirements
- Leaving cyber/OT risk uninsured where production depends on systems
These moves can reduce premium short-term but create catastrophic gaps.
FREQUENTLY ASKED QUESTIONS
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What’s the fastest way to reduce steel manufacturing insurance premiums?
The fastest sustainable route is reducing claims frequency and improving risk presentation to insurers. Strong documentation (maintenance, hot works controls, training) and clear values can reduce uncertainty and pricing loadings.
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Will increasing my excess reduce my premium?
Often, yes - especially for sections with frequent, smaller claims. The key is choosing an excess you can comfortably fund without creating cashflow stress. We can model excess options against your claims profile.
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Does improving fire safety really reduce premiums?
Yes, it can. Insurers price based on severity potential. Evidence of hot works controls, electrical maintenance, housekeeping, detection and strong separation of combustibles can improve terms and reduce risk loadings over time.
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Can cyber controls reduce cyber insurance costs?
Typically, yes. MFA, strong backups with restoration testing, segmentation between IT and OT, restricted remote access and an incident response plan are commonly requested controls and can materially improve insurer appetite and pricing.
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Is it safe to cut business interruption cover to save money?
Reducing BI can create significant gaps if the indemnity period or sums insured no longer match realistic recovery timelines. Many steel businesses find BI is the most valuable cover after a major loss - we recommend optimising it rather than cutting it blindly.
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How can Insure24 help reduce premiums?
We help you present risk clearly, identify insurer-friendly improvements, review programme structure, and negotiate terms based on evidence. Over time, reduced claims and improved controls typically lead to better pricing stability.