Machine Shop Liability Insurance

General Liability For Machine Shops

General liability is the policy every OEM purchasing portal, landlord, and prime contractor asks about before your first purchase order clears, and for a shop cutting to print, the weight of it sits in products and completed operations, because a part blamed for a failure comes back to whoever machined it, months or years after delivery.

Key protections included in a machine shop general liability policy typically bundle the following under shared limits.

• Bodily injury to visitors on your floor, the customer's engineer who slips on coolant tracked past a CNC cell, the delivery driver clipped at the dock.
• Property damage your operations cause to others, such as bar stock shifting during loading and a carrier's trailer wall caving in.
• Completed operations claims: the out-of-tolerance part installed in a customer's assembly that later damages equipment around it.
• Defense costs, which in machined-component disputes routinely outrun the claimed damages.

The rest of the shop's program, property, equipment breakdown, customer material, and the crew lives on our machine shop business insurance page. This page goes deep on the liability side that those purchase orders are written around.

Customer Property Coverage For Machine Shops

For the material, molds, and gauges that belong to someone else.

Inland marine and customer property forms pick up what liability coverage walks past: customer-supplied stock, dies, fixtures, and work in process in your custody, plus parts moving between outside processors in the routing.

Customer property coverage can help pay for:

• Damage to customer material and tooling in your shop.
• Work in process lost to a covered event.
• Parts in transit to heat treat and plating houses.

Commercial Auto For Machine Shops

For the trucks running parts and picking up material.

Commercial auto insurance may cover accidents in shop vehicles on delivery and supply runs, with hired and non-owned coverage for employee cars pressed into service when the truck is loaded.

Commercial auto can help pay for:

• Accidents involving shop trucks and vans.
• Damage your vehicles cause to people and property.
• Claims from employee vehicles on shop errands.

Endorsements Machine Shops Commonly Need For Purchase Order Compliance

OEM and prime contractor paperwork keeps asking for the same handful of endorsements, and missing one can gut your coverage right when a customer tenders a claim.

1. Additional insured, ongoing operations. Extends liability protection to the customer for claims tied to your work while it is in progress.
2. Additional insured, completed operations. Covers the customer for claims that surface after your parts are delivered and installed; the wording is "aerospace and automotive flow-downs," checked by name.
3. Primary and noncontributory wording. Puts your policy first in line before the customer's own insurance contributes.
4. Waiver of subrogation. Stops your carrier from pursuing the customer after paying a covered claim, a standard flow-down in OEM contracts.
5. Per project aggregate. Restores a fresh aggregate limit for each project or location, so one busy contract cannot drain the limits that other customers rely on.