Engineering Insurance
Engineering insurance is two different products sold under one name. For a firm that makes, installs or repairs things, it is a trading programme built around other people’s property and your own skill. For anyone who simply depends on a machine, it is breakdown cover, the interruption behind it, and a set of statutory examination duties that exist whether or not anything is insured. This page separates the two, sets out what a breakdown section does and does not do, and explains why the examination record matters as much as the premium.
The Short Answer
The first question is which of you is asking. Insurance for engineering companies splits cleanly in two, and a proposal written for the wrong half is the most common thing we see on this class.
If you operate the machines. Machinery breakdown cover for insured sudden damage, electronic equipment cover for specified equipment, and the machinery business interruption that follows — which is usually the larger number and the one set without modelling. Plant, erection and installation can need sections of their own.
If you are the engineering business. Employers’ liability and public liability for a working firm, products for what you supply and fit, professional indemnity wherever you specify or design rather than simply build, customer goods on your floor, equipment under repair, and the kit in transit between the two — a goods in transit question rather than an engineering one.
And frequently both at once. An engineering firm that runs its own plant is a machinery user as well as a trader, and the same incident can produce physical damage to a machine and a customer’s pure financial loss on the same afternoon. Those two need different cover analysis, not one limit.
One cover worth naming because people assume it is already there. Deterioration of stock responds to an insured refrigeration event, and on at least one major insurer’s range it is sold as a distinct engineering-related product rather than as a feature of property insurance. If a cold chain matters to you, ask the question specifically.
Where this page stops. A firm making things at volume is buying a manufacturing programme, and that is on our manufacturing insurance page. A mechanical or electrical contractor working under a building contract with insurance clauses in it is on our construction insurance page. Engineering business insurance sits between the two, and which of the three you need is usually settled in one conversation.
Assets, Breakdown, Dependency, Ownership
An engineering account is rated asset by asset rather than on turnover, and three of these four are facts somebody has to keep current. The fourth is a judgement that only gets tested once.
Descriptions, serial numbers, locations, replacement values, ages and operating hours — for everything, not for the machines somebody remembered. The inventory is doing two jobs at once, because it sets the terms and it is also the list the examination regime has to match. A gap in it is usually a gap in both of them, and it is far more often an asset nobody allocated than an asset nobody knew about.
A breakdown section is narrower than the word suggests, and the boundaries are worth settling before anything fails. Mechanical against electrical breakdown, operator error, pressure explosion, and damage during testing or commissioning are separate questions with separate answers. Electronic equipment is normally its own specified section, and the control software a modern machine runs on raises a cyber question too.
Map the bottleneck rather than the balance sheet: one specialist machine can stop several profitable lines while representing a small share of total plant value. Then price the recovery honestly — overseas spares, sole-source components, software licences, validation and the commissioning engineer who is booked up. A supplier’s promised delivery time is not a promise that survives a regional catastrophe.
Four kinds of kit sit on a site and only one of them is simply yours. Leased machines where the agreement allocates responsibility somewhere specific, landlord-owned lifts and boilers that usually fall outside a tenant’s programme entirely, hired-in plant, and customer-owned equipment on your floor or your equipment under repair at theirs. Each has a different answer and none is automatic.
The thread through all four is that engineering company insurance is assembled from an asset list, not from a turnover figure. Send the schedule with the serial numbers on it. It is a dull document that settles more questions than any other single thing you could give an underwriter, and it is the same list the examination regime is measured against.
The Legal Position
No law requires anyone to buy an engineering breakdown policy, and there is no general fine for not having one. What the law does require is that work equipment is suitable, maintained and safely used, and that some of it is examined. Those are operational duties. They are not a statutory instruction to buy a product called engineering insurance, and nothing you purchase discharges them.
Three regimes do most of the work, and they are worth naming precisely. PUWER concerns the suitability, maintenance and safe use of work equipment. LOLER adds lifting-specific duties, including examination — HSE identifies examination at six-month intervals for equipment that lifts people and for lifting accessories, and twelve months for other lifting equipment, unless an appropriate examination scheme specifies otherwise. Under PSSR 2000, qualifying pressure systems need a written scheme of examination and examination before use as required. The detail that catches people is simpler than any of that: inspection and servicing are not substitutes for each other. A machine can be beautifully maintained and still not have been examined.
So the three things that decide whether you have met the duty are not on the policy schedule. They are the equipment inventory, the competent-person arrangements behind the examinations, and the completed remedial work afterwards. A firm can buy insurance and still fail to meet its statutory examination duties — and buying more insurance does not move it any closer. Relevant safety breaches can lead to notices, prohibition and prosecution.
Where this gets genuinely confusing is the combined offering. Inspection and insurance are often sold together, which is convenient and entirely legitimate, but it blurs two different things. A combined inspection-and-insurance service should identify clearly which element is a service and which transfers risk — and if yours does not, that is the question to ask first, because only one half of it is protecting you from a prosecution.
The uninsured consequence of a breakdown is commercial rather than criminal: repairs, replacement, hire of temporary plant and the downtime around all three. The uninsured consequence of a missed examination is the other way round. Treating an insurance certificate as a statutory inspection certificate confuses the two, and it is the single most expensive mistake on this page.
Where the Cover Stops
None of these is a defect in the product. They are the edges of it, and every one of them is cheaper to establish now than during a claim or an inspection.
Breakdown answers sudden damage, and the slow things are a different matter entirely. Ask specifically how the wording treats wear and tear, gradual deterioration, defective maintenance, corrosion and consumables, because these are the usual boundaries and the answer varies by wording rather than being settled market-wide. The honest position is that nobody can tell you without reading yours.
A maintenance contract and an insurance policy answer different questions, and the gap between them is almost always the consequential loss. A maintenance contract does not necessarily indemnify business interruption, however comprehensive it looks: it commits somebody to fixing the machine, not to funding the weeks you could not trade. Read the two documents together, once, before you need either of them.
A policy is not an examination, an insurer is not your regulator, and an insurance certificate is not an examination report. Where inspection and insurance arrive in the same proposal, establish which element is a service and which transfers risk, and get the completed examination records rather than a schedule that implies them. This is the misunderstanding the rest of this page exists to correct.
Cover tends to be written around equipment in a place, and engineering equipment moves. Hired-in plant, machines at a customer’s site, your customer’s equipment under repair on your floor, and plant in transit between the two are four separate questions. So is the cost of expediting a repair — air freight, overtime, a temporary hire — which is frequently where the real money goes.
And one that cuts across all four: a policy that pays for damage does not retrospectively make an unsafe system lawful. That sentence is worth keeping somewhere visible, because it is the difference between an insurance problem, which is about money and can usually be fixed afterwards, and a safety problem, which is about a duty and cannot.
Before Quoting
Engineering liability insurance and machinery cover are rated on the assets, the dependencies and the records. Four groups of answers do nearly all of it.
The inventory first, then everything that has happened to it: inspection reports, maintenance history, previous breakdowns and how hard each machine has actually been worked. A schedule with ages and operating hours on it is a different document from a list of machines, and it is the one that moves terms. Send it as it is rather than as you would like it to look.
Which machines are critical, which have no second, and what a replacement really involves. Overseas spares, sole-source components, software licences that have to be reissued, validation before you can sell what comes off the line again, and the commissioning engineer nobody can book. These set the indemnity period, and the indemnity period sets the claim.
Engineering contractor insurance turns on the work rather than the premises. Whether you specify or design as well as build, what you supply and fit, whose equipment comes onto your floor, and what your contracts say about all of it. Design and specification are a professional indemnity question, and a supplied component is a products liability one.
Which assets fall under examination duties, who carries those examinations out, whether a written scheme exists where pressure systems qualify, and whether the remedial work identified last time was completed. Then the ownership question underneath: leased machines, landlord-owned lifts and boilers, and anything hired in. Nobody is asking you to be the expert. We are asking who is.
The answer that most often turns out to be wrong is the one about who examines what. Not because anyone is careless, but because responsibility for a leased machine or a landlord’s lift sits in a document nobody has read since it was signed, and a previous inspection provider may simply not have examined every asset. Finding that out is a half-hour job now and a very bad afternoon later, and it is worth doing whether or not we end up arranging anything for you.
Who You Would Deal With
This is the one class where the handling chain matters as much as the placing, because the questions arrive between renewals and most of them are about an asset rather than a premium.
Ian Cooke has thirty-four years in the industry, leads the internal team and owns compliance. On this class that matters more than usual, because the useful conversation is about which of your duties insurance answers and which it does not. Ian Snowdon looks after clients across farming, manufacturing and professional services, and Jody Sutherland provides internal support to Ian Snowdon with over eighteen years in the industry — so the person placing the account and the person you would actually ring about an asset already work on the same book.
Colin Thompson is our Claims Manager, with over eighteen years in the role. A machinery claim runs on two clocks at once: the repair, and the trading loss that outlasts it. Claims are handled in house, by someone who will have read the schedule before you call, and the rest of the team is on our team page.
Engineering Insurance Enquiry
Park is an independent engineering insurance broker in Durham, arranging cover for engineering firms and for businesses that simply depend on their plant, across the North East and the rest of the UK. Six questions and an optional upload. The two answers that decide the most are which machine you could not replace quickly and who examines the assets that have to be examined. Send your asset schedule or your last examination report if you have them — an engineering insurance quote written without serial numbers is a quote for a different business. One working day, no fee, no obligation.
Common Questions
Two different things under one name. For a business that depends on its machines: machinery breakdown for insured sudden damage, electronic equipment cover for specified items, deterioration of stock where a cold chain matters, and the machinery business interruption behind all of it, with plant, erection and installation as separate sections where they apply. For an engineering firm: employers’ and public liability, products, professional indemnity where you specify or design, customer goods, equipment under repair and transit. Many firms need both halves.
No. There is no universal requirement to buy an engineering policy and no general fine for not having one. Employers’ liability is compulsory once you employ anyone and motor cover applies to vehicles on a road; the rest is driven by contracts, lenders and landlords. What does apply to you is the examination and work-equipment regime, and that is a separate obligation that no policy satisfies.
No, and this is the most common and most expensive misunderstanding in the class. Insurance transfers financial risk. LOLER imposes duties about lifting equipment, including examination, and those are discharged by completed examinations carried out under proper competent-person arrangements — not by holding a policy. Where inspection and insurance are sold together, establish which element is a service and which transfers risk. An insurance certificate is not an examination report.
HSE identifies examination at six-month intervals for equipment that lifts people and for lifting accessories, and at twelve months for other lifting equipment, unless an appropriate examination scheme specifies otherwise. That last clause matters, because a written examination scheme drawn up for your equipment can set different intervals. Note also that inspection and servicing are not substitutes for each other — a well-maintained machine can still be overdue an examination.
It is the document required under the Pressure Systems Safety Regulations 2000 for qualifying pressure systems, setting out what is examined, how and when, with examination before use as required. If you have a pressure system, the questions to settle are whether a written scheme exists, whether it covers every item, and whether the remedial work from the last examination was completed. The equipment inventory and the competent-person arrangements behind it matter as much as the premium.
Generally this is where a breakdown section stops rather than starts, and it is worth asking the question directly against your own wording rather than assuming. Wear and tear, gradual deterioration, defective maintenance, corrosion and consumables are the usual boundaries, and the treatment varies. Breakdown is written around sudden damage; the slow decline of a machine is a maintenance cost by a different name.
It covers a different risk. A maintenance contract commits somebody to fixing the machine; it does not necessarily indemnify the business interruption while it is being fixed, and that is usually the larger number. It is also not an examination. Read the maintenance contract, the policy and the examination records together once, and you will generally find the gap is consequential loss rather than repair.
Yes. Send the asset schedule with serial numbers, values, ages and operating hours, the last examination reports, and a note of which machines you could not quickly replace. We will tell you whether the values and the indemnity period survive contact with reality, whether every asset that should be examined is on somebody’s list, whether leased and landlord-owned equipment has been allocated, and whether anything is being paid for twice. If it is correctly arranged we will say so, and there is no fee either way.
